In its long-run equilibrium, a firm in monopolistic competition
A) makes zero economic profit and operates with excess capacity.
B) makes zero economic profit and produces above capacity output.
C) makes a positive economic profit and operates with excess capacity.
D) makes a positive economic profit and produces above capacity output.
A
You might also like to view...
Profits and losses are TRUE signals because they
A) convey information about true long-run profits. B) cannot be misinterpreted by entrepreneurs. C) convey information about where to place resources and reward people who act on the information. D) reward people who make profits with even more profits and punish those who make losses with even more losses.
If the government created a surplus of an agricultural product due to price supports, how might they dispose of this surplus?
A. have the farmer destroy the crop B. purchase it and store it away C. give it away to a foreign country D. Any of these answers might be a successful tool in disposing of agricultural surpluses.