Asked by Silupe Lanier on Jul 04, 2024
Verified
Since a monopolistically competitive firm has a monopoly over the particular product it produces, the firm is guaranteed a profit in the long run.
Monopolistically Competitive
An economic setup in which a variety of businesses market goods that are comparable yet distinct, enabling them to have some market control and differentiate their offerings.
Guaranteed A Profit
An assurance that an investment or business endeavor will yield a positive return or profit.
Long Run
In economics, a period in which all inputs, including capital, can be fully adjusted, allowing firms to change their scale of operation.
- Examine the efficiency and impacts of monopolistic competition through immediate and extended time frames.
Verified Answer
ZK
Zybrea KnightJul 06, 2024
Final Answer :
False
Explanation :
In monopolistic competition, firms can make profits in the short run, but in the long run, the entry of new firms into the market increases competition and drives down prices and profits, making it not guaranteed for a firm to earn a profit.
Learning Objectives
- Examine the efficiency and impacts of monopolistic competition through immediate and extended time frames.