In the long run, profits in a monopolistic competition market are zero because:
a. of government regulations.
b. of collusion.
c. firms are free to enter and exit the market.
d. firms produce a differentiated product.
Ans: c. firms are free to enter and exit the market.
Economics
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Economics
Refer to Figure 5-5. If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does D2 represent?
A) the demand curve reflecting the sum of social and external benefits B) the demand curve reflecting social benefits C) the demand curve reflecting private benefits D) the demand curve reflecting external benefits
Economics