Which of the following is one market trend that results when a monopolistically competitive firm starts earning profits well above its costs?

a. The firm would become an oligopolistic firm because it has effectively eliminated the competition and now dominates the market alone.

b. The firm would try to lure 100 percent of customers by flooding the market with defective products.

c. Fierce competition would encourage rivals to create new ways to differentiate their products and lure customers to them.

d. The firm would eventually go out of business because demand would decrease.

Question

Cael Harvey

History

27 August, 03:32

Which of the following is one market trend that results when a monopolistically competitive firm starts earning profits well above its costs?

a. The firm would become an oligopolistic firm because it has effectively eliminated the competition and now dominates the market alone.

b. The firm would try to lure 100 percent of customers by flooding the market with defective products.

c. Fierce competition would encourage rivals to create new ways to differentiate their products and lure customers to them.

d. The firm would eventually go out of business because demand would decrease.

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Answers (1)

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Sasha Bush · Answer 1

The right answer for the question that is being asked and shown above is that: " a. The firm would become an oligopolistic firm because it has effectively eliminated the competition and now dominates the market alone."