The cost of producing a tube of tooth paste is $0.05. If the market for tooth paste is monopolistically competitive, a manufacturer who charges $0.05 for each bottle will ________. a. exit the industry in the long run b. earn zero economic profits in the short run c. incur a loss in the short run d. shut down production in the short run
The cost of producing a tube of tooth paste is $0.05. If the market for tooth paste is monopolistically competitive, a manufacturer who charges $0.05 for each bottle will ________. a. exit the industry in the long run b. earn zero economic profits in the short run c. incur a loss in the short run d. shut down production in the short run
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: Monopolistic Competition
Section16.3: Advertising
Problem 3QQ
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The cost of producing a tube of tooth paste is $0.05. If the market for tooth paste is
a.
exit the industry in the long run
b.
earn zero economic profits in the short run
c.
incur a loss in the short run
d.
shut down production in the short run
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