Asked by Kendra Grady on Jul 03, 2024
Verified
Monopolistically competitive sellers realize economic profits in the long run because entry barriers are significant.
Monopolistically Competitive
Describes a market structure where many firms sell products that are similar but not identical, allowing for significant differentiation and some degree of market power over prices.
Entry Barriers
Obstacles that prevent new competitors from easily entering an industry or area of business.
- Understand the impact of entry and exit barriers on competitive dynamics and their influence on sustained profitability.
Verified Answer
ML
Malissa Lizet
Jul 10, 2024
Final Answer :
False
Explanation :
In monopolistic competition, there are low entry barriers, allowing new firms to enter the market easily, which erodes economic profits in the long run.
Learning Objectives
- Understand the impact of entry and exit barriers on competitive dynamics and their influence on sustained profitability.
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