Because advertisement services are differentiated, Facebook sets the price equal to marginal revenue. Facebook can mark up the price. Facebook is a price taker. Facebook sets the price equal to marginal cost. If Facebook is correct and other firms are not technically prevented from entering the market and selling advertising spa then Facebook should expect to have economic profits in long run. Zero Positive Ambiguous Negative

Because advertisement services are differentiated, Facebook sets the price equal to marginal revenue. Facebook can mark up the price. Facebook is a price taker. Facebook sets the price equal to marginal cost. If Facebook is correct and other firms are not technically prevented from entering the market and selling advertising spa then Facebook should expect to have economic profits in long run. Zero Positive Ambiguous Negative

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter11: Price And Output Determination: Monopoly And Dominant Firms

Section: Chapter Questions

Problem 2E: Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large...

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