In competitive market structure, firms earn zero economic profit in the long run but still remain in the market.Firms facing loss in short run may continue to produce in a competitive market structure.Price discrimination is beneficial for the society in general but it is difficult to practice in real world.Monopolistically competitive firms are producing efficiently because P=MC in the long-run.5. Advertising helps raise revenue for the firms and provides information to the customers; therefore, expenditures on advertising are justified.

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Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter10: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 9SQ

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In competitive market structure, firms earn zero economic profit in the long run but still remain in the market.
Firms facing loss in short run may continue to produce in a competitive market structure.
Price discrimination is beneficial for the society in general but it is difficult to practice in real world.
Monopolistically competitive firms are producing efficiently because P=MC in the long-run.
5. Advertising helps raise revenue for the firms and provides information to the customers; therefore, expenditures on advertising are justified.

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