In general, monopolistically competitive firms earn profits _____.
(A) Higher than oligopolies.
(B) Slightly above their costs in the long run.
(C) Well above their costs in the long run.
(D) About the same as oligopolies.
Ans: (D) About the same as oligopolies.
You might also like to view...
Suppose at the current level of labor used, MRP = $100 and MFC = $50. To maximize profits, the firm should
A) hire more labor. B) reduce the level of labor. C) maintain the current level of labor. D) shut down.
Which of the following statements about Coasian reasoning is true?
a. Coasian reasoning lacks symmetry, it does not provide a starting point for negotiations toward an efficient outcome. b. Coasian reasoning emphasizes on the benefits received by the person having more rights compared to the others in the group. c. Coasian reasoning explains how the costs and benefits of a transaction are distributed among the parties. d. Coasian reasoning provides a starting point for negotiations toward an efficient outcome, if the cost of negotiation is low.