Asked by
Heather Miller
on Oct 26, 2024
Verified
When a monopolistically competitive industry earns economic profit,the result of competition among sellers is usually that:
A) the price of the product increases to monopoly level.
B) the price of the product quickly reaches the perfectly competitive level.
C) firms in the industry gain market share.
D) firms in the industry lose market share.
Economic Profit
The profit a company makes after subtracting both its explicit and implicit costs.
Monopolistically Competitive Industry
An industry characterized by many firms, differentiated products, and free entry and exit.
Market Share
The fraction of the total industry output accounted for by a given producer’s output.
- Differentiate between short-term and long-term equilibrium results in a monopolistically competitive market.
- Evaluate the role and outcomes of economic profits in monopolistic competition.
Verified Answer
ZS
Learning Objectives
- Differentiate between short-term and long-term equilibrium results in a monopolistically competitive market.
- Evaluate the role and outcomes of economic profits in monopolistic competition.