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Prince Mugabo
on Nov 16, 2024

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Which of the following is not a key feature of monopolistic competition?

A) Price above the minimum average total cost
B) Zero economic profits for firms in the long run
C) Positive economic profits for firms in the long run
D) Entry and exit in the long run

Monopolistic Competition

A market structure characterized by the presence of several firms that sell similar, but slightly differentiated, products and services where each has some control over its prices.

Zero Economic Profits

A situation in perfectly competitive markets where firms earn just enough revenue to cover their total operating costs, leaving no supernormal profit.

Positive Economic Profits

The situation in which a firm's total revenues exceed its total costs, including both explicit and implicit costs, signaling that the firm is doing better than the next best alternative.

  • Clarify the principles governing entry and exit during long-term market equilibrium.
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Shelette CarlisleNov 21, 2024
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