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Economics (AS & A Level) · Oct / Nov 2022 · Paper 31 · Question 8

9708Different market structures

What explains why, in long-run equilibrium in monopolistic competition, firms make only normal profits?

  1. Aconsumer resistance
  2. Bdecreasing returns to scale
  3. Cdifferentiated products
  4. Dfreedom of entry and exit

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Correct answer: D. freedom of entry and exit

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