Multiple Choice
When a profit-maximizing firm in a monopolistically competitive market charges a price higher than marginal cost,
A) the firm must be earning a positive economic profit.
B) the firm may be incurring economic losses
C) there is a deadweight loss to society, but it is exactly offset by the benefit of excess capacity.
D) new firms will necessarily wish to enter the market in the long run.
Correct Answer:
Verified
Correct Answer:
Verified
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