Describe how economic losses are eliminated in a perfectly ...

[tichca]

Describe how economic losses are eliminated in a perfectly competitive industry.
 
  What will be an ideal response?

Question 2

In the long run, monopolistically competitive firms can make an economic profit because of product differentiation.
 
  Indicate whether the statement is true or false

[mammy1697]

Answer to Question 1

If firms are incurring economic losses, some will exit in the long run. When firms exit, the market supply decreases and the market supply curve shifts leftward. When supply decreases, the price rises. As the price rises, the surviving firms increase production and their economic losses are eliminated.

Answer to Question 2

FALSE

[tichca]

Excellent

[gcook]

Great answer, keep it coming