Asked by
Laura Jordan
on Nov 26, 2024
Verified
Which statement concerning monopolistic competition is false?
A) In the long run P = ATC > MC.
B) Firms may experience losses in the short run.
C) Firms differentiate their products, but the products are relatively substitutable.
D) Firms may experience positive economic profits in the long run.
Monopolistic Competition
A market structure characterized by many sellers offering differentiated products or services, allowing for some degree of market power and price control.
Economic Profits
Profits earned by a firm after accounting for both explicit and implicit costs.
- Explain how monopolistically competitive markets achieve or fail to achieve allocative and productive efficiency.
- Recognize the situations that lead to profit generation or loss incurrence for enterprises operating in a monopolistically competitive market.
Verified Answer
IC
Learning Objectives
- Explain how monopolistically competitive markets achieve or fail to achieve allocative and productive efficiency.
- Recognize the situations that lead to profit generation or loss incurrence for enterprises operating in a monopolistically competitive market.
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