Why do most firms in monopolistic competition typically make zero profit in the long run?
A) because the lack of entry barriers would compete away profits
B) because the total market is not large enough to accommodate so many firms
C) because firms do not produce at their minimum efficient scale
D) because firms produce differentiated products
A
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Under the Social Security program currently in existence
A) benefits are based on need. B) benefits are determined by whether or not one contributed to the system. C) benefits are provided to everyone who contributed to the system EXCEPT those under private retirement programs that provide an annual income in excess of $13,500. D) benefits are guaranteed to be no lower for future retirees than for current retirees.
One problem associated with a monopoly firm is that it
A) produces too little output but also charges a low price. B) produces too much output and charges too low a price. C) restricts output and charges a relatively higher price than a purely competitive firm. D) is just as good as a purely competitive firm in terms of output and price.