Question

Monopolistically competitive firms are similar to monopolies in that they are able to       earn economic...

Monopolistically competitive firms are similar to monopolies in that they are able to       earn economic profits in the long run. Do you agree with this statement? If not, then    why not?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

In a monopolistic competitive market in the long they make zero economic profit where as in a monopoly the firm will make positive economic profit. The main reason why monopolistic competitive market don't make any profit is because in the long run the firms average cost will increase and the demand will decrease. In long run monopolistic competitive market is similar to perfectly competitive market as there will be new entrants in the market thus the firms economic profit will decline in short with compared to positive profit in long run.

Hence I won't agree with this statement. In monopoly firm will make economic profit both long and short run unlike monopolistic competitive market.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Like monopolies, monopolistically competitive firms face downward sloping demand curves, but cannot earn long-run economic profits....
Like monopolies, monopolistically competitive firms face downward sloping demand curves, but cannot earn long-run economic profits. (T/F) Explain your reasoning.
What is the defining characteristic of a monopolistically competitive firm? Select one: a. Monopolistically competitive firms...
What is the defining characteristic of a monopolistically competitive firm? Select one: a. Monopolistically competitive firms are price makers b. Differentiated product c. Monopolistically competitive firms do not make economic profits in the long run d. There are many small sellers in the market
In the long run, monopolistically competitive firms tend to have: high economic profits. substantial economic losses....
In the long run, monopolistically competitive firms tend to have: high economic profits. substantial economic losses. zero economic profits. negative economic profits.
For monopolistically competitive firms is it always likely in the long-run to have zero-economic profit? Monopolistically...
For monopolistically competitive firms is it always likely in the long-run to have zero-economic profit? Monopolistically competitive firms in the long-run
The force that leads to zero economic profits for monopolistically competitive firms in the long run...
The force that leads to zero economic profits for monopolistically competitive firms in the long run is A.  excess capacity. B.  price wars among firms. C.  entry by new firms. D.  excessive advertising.
In long run equilibrium, monopolistically competitive firms experience ______ economic profits. A positive B zero C...
In long run equilibrium, monopolistically competitive firms experience ______ economic profits. A positive B zero C negative D can not be determined
In the long run, monopolistically competitive firms _______. 1) produce output at a minimum marginal cost....
In the long run, monopolistically competitive firms _______. 1) produce output at a minimum marginal cost. 2) face perfectly elastic demand curves. 3) earn both positive accounting amd economic profits. 4) earn zero economic profit but positive accounting profit. 5) merge and form a few dominant firms to maximize profit.
In monopolistically competitive industries, economic profits are competed away in the long run; hence, there is...
In monopolistically competitive industries, economic profits are competed away in the long run; hence, there is no valid reason to criticize the performance and efficiency of such industries. In monopolistically competitive industries economic profits might be increased, but there will be productive inefficiency. economic profits might be diminished and there will be productive inefficiency. economic profits might be increased and there will be productive efficiency. economic profits might be diminished, but there will be productive efficiency. b. “In the long...
Which firms typically have zero economic profits in the long run? options: A) monopolist, perfectly competitive...
Which firms typically have zero economic profits in the long run? options: A) monopolist, perfectly competitive B) perfectly competitive, monopolistically competitive C) oligopolist, monopolistically competitive D) perfectly competitive, oligopolist
Monopolistic Competition & Oligopoly Please elaborate on answer. TRUE OR FALSE - A monopolistically competitive market...
Monopolistic Competition & Oligopoly Please elaborate on answer. TRUE OR FALSE - A monopolistically competitive market is efficient in its long-run equilibrium because all firms in the market earn a zero economic profit. TURE OR FALSE - Department stores are monopolistically competitive because stores differ in the amount of customer service they provide. Why does entry into markets decrease firm profits? Describe some of the ways in which firms differentiate their products.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT