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Entry of new firms into a market results in less product differentiation

  Entry of new firms into a market results in less product differentiation.

 

32.              Economists may hold many different views about the economy but on this they all agree:
                            That price is always lower in a perfectly competitive market than in a monopoly market.

33.              According to economist Joseph Schumpeter, technological advance is more likely to
                            occur in a monopoly than in perfect competition.

34.              Economic profit is the same as normal profit.

 

35.              According to economists, although a monopoly’s price will be higher than a perfectly
                            competitive firm’s price when both produce the same good, the monopoly produces the
                            good more efficiently.

36.              Monopolistically competitive firms produce differentiated products.

 

37.              Implicit costs will be zero in the long run.

 

38.              If marginal revenue exceeds marginal cost, the firm should increase output to maximize
                            profit.

39.              To maximize profit, a perfectly competitive firm will produce where MR = MC, but a
                            monopoly and a monopolistically competitive firm will produce where price = ATC.

40.              A monopoly’s economic profit is protected by the lack of entry of new firms even in the
                            long run.

Dec 12 2019 View more View Less

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