Which of the following are characteristics of monopolistic competition in the long runA. blocked entry into the market□ B. zero economic profit□ C. full efficiency□ D. lower production than competitive markets

Answered: Which of the following are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following are characteristics of monopolistic competition in the long run
A. blocked entry into the market
□ B. zero economic profit
□ C. full efficiency
□ D. lower production than competitive markets

Expert Solution

Introduction

In a market system known as monopolistic competition, there are large sellers, each of whom offers a differentiated good. Each market seller has some control over the product's pricing due to the differentiation of the products. Because there are no entrance restrictions in this kind of market, new enterprises can enter with ease. Advertisements are a tool used by businesses to influence consumer demand patterns and persuade customers to purchase their goods over those of rivals.

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