In the long-run, the amount of economic profits:for firms under monopolistic competition tend to diminish so that no more than normal profits can beearned, because entry barriers are fairly low, unless they can successfully and continuously differentiate theirproduct or service.for (unregulated) monopoly firms always tends downward toward zero because consumers easily find closesubstitute goods or services.for firms under perfect competition will tend to get ever higher because free entry of new firms adds to theprofits of the existing firms in the market.O for firms under perfect competition will tend to get higher over time because small-sized firms are constantlyinvesting large sums of money in the latest production technologies and in innovations through research anddevelopment (R&D).MacBook ProG Search or type URL2457 What is a feature common to both Monopolistic-Competition and Oligopoly type of markets?productive efficiency will occur in both the short run and long run, a desirable economic property of markets.many smaller sized fırms can produce the good or service at lower cost per unit than larger sized firms, thuslarge firms fail in the long run.the demand curve for each fırm is not going to be purely elastic, because products are at least slightlydifferent than potential rival fırms' product and/or there may be some consumer brand loyalty.Firms in both types of markets eventually will be broken up by government anti-trust laws and regulations.MacBook ProG Search or type URL+,%23&*358.9.WE01

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Answered: In the long-run, the amount of economic…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In the long-run, the amount of economic profits:
for firms under monopolistic competition tend to diminish so that no more than normal profits can be
earned, because entry barriers are fairly low, unless they can successfully and continuously differentiate their
product or service.
for (unregulated) monopoly firms always tends downward toward zero because consumers easily find close
substitute goods or services.
for firms under perfect competition will tend to get ever higher because free entry of new firms adds to the
profits of the existing firms in the market.
O for firms under perfect competition will tend to get higher over time because small-sized firms are constantly
investing large sums of money in the latest production technologies and in innovations through research and
development (R&D).
MacBook Pro
G Search or type URL
24
5
7

Transcribed Image Text:What is a feature common to both Monopolistic-Competition and Oligopoly type of markets? productive efficiency will occur in both the short run and long run, a desirable economic property of markets. many smaller sized fırms can produce the good or service at lower cost per unit than larger sized firms, thus large firms fail in the long run. the demand curve for each fırm is not going to be purely elastic, because products are at least slightly different than potential rival fırms' product and/or there may be some consumer brand loyalty. Firms in both types of markets eventually will be broken up by government anti-trust laws and regulations. MacBook Pro G Search or type URL +, %23 & * 3 5 8. 9. W E 01

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