Assume the firms in a monopolistically competitive industry initially are earning positive economic profits. Which of the following will not occur over time?

A) The firms' economic profits will be reduced.
B) New firms will enter.
C) Demand for the existing firms' output will become more inelastic.
D) The number of substitutes available in the industry will increase.

C

Economics

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A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firm's average variable cost but greater than the firm's average fixed cost

a. True b. False Indicate whether the statement is true or false

Economics

The Lucas critique focuses specifically on:

A. the role that economic policymaking has on people's economic behavior. B. the relationship between Fed policy and the money supply. C. the inability to measure economic performance accurately. D. the moving away from fixed exchange rates to flexible exchange rates.

Economics