Which of the following statements about a monopolistically competitive seller is FALSE?
A) The seller produces a differentiated product while a pure competitor does not.
B) The seller earns economic profit over the long run while a pure competitor does not.
C) The seller faces a downward-sloping demand curve for its product while a pure competitor does not.
D) The seller operates at greater than minimum average total cost in the long run while a pure competitor does not.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms can earn economic profits in the short run, but in the long run, the entry of new firms into the market drives these profits to zero, similar to perfect competition.

Which of the Following Statements About a Monopolistically Competitive Seller