In the above table, which tax plan is proportional? A) only ...

[saraeharris]

In the above table, which tax plan is proportional?
 
  A) only plan A
  B) only plan B
  C) only plan C
  D) both plan A and plan C

Question 2

Why are firms in monopolistic competition unable to make an economic profit in the long run?
 
  What will be an ideal response?

[patma1981]

Answer to Question 1

A

Answer to Question 2

While firms in monopolistic competition do not produce an identical product, such as perfectly competitive firms do, they face the same problem other competitive firms face: freedom of entry. When firms in monopolistic competition are making an economic profit, other firms enter the market. Entry decreases the demand for the products of the existing firms and thereby decreases their economic profit. Firms will continue to enter the market until the economic profit equals zero.