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The possibility that a firm can earn positive long run profits is det

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The possibility that a firm can earn positive long-run
profits is determined by: A. the ability to set price B. the
degree of product differentiation C. entry conditions D. the
number of firms
Solution
The possibility for a firm to earn positive profits in the long
run is determined by the entry condition.
If there is free entry/exit of firms allowed, then there will be
competition among firms and thus to possibility of earning
positive economic profits in the long run will be eliminated.
Firms will only be earning normal profits.
However, if the entry of new firms is restricted (just like
monopoly), the firm would earn positive economic profits in
the long run due to absence of competition and monopoly
power over the market.

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The possibility that a firm can earn positive long -run profits is determined by: A. the ability to set price B. the degree of product differentiation C. entry conditions D. the number of firms Solution The possibility for a firm to earn positive pro fits in the long run is determined by the entry ...
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