As firms enter and exit a monopolistically competitive market, what happens to productive efficiency in the long run? Group of answer choices 1-Productive efficiency will not be reached because in the long run, economic profits reach equilibrium. 2-Prices will rise to unprecedented levels, and productive efficiency will be reached. 3-The strongest firms will survive and the market will morph into an oligopolistic market. 4-Price will eventually intersect the average cost curve at a point where price > average cost, and productive efficiency
As firms enter and exit a monopolistically competitive market, what happens to productive efficiency in the long run? Group of answer choices 1-Productive efficiency will not be reached because in the long run, economic profits reach equilibrium. 2-Prices will rise to unprecedented levels, and productive efficiency will be reached. 3-The strongest firms will survive and the market will morph into an oligopolistic market. 4-Price will eventually intersect the average cost curve at a point where price > average cost, and productive efficiency
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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As firms enter and exit a monopolistically competitive market, what happens to productive efficiency in the long run?
Group of answer choices
1-Productive efficiency will not be reached because in the long run, economic profits reach equilibrium.
2-Prices will rise to unprecedented levels, and productive efficiency will be reached.
3-The strongest firms will survive and the market will morph into an oligopolistic market.
4-Price will eventually intersect the average cost curve at a point where price > average cost, and productive efficiency will not be reached
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