c. In long-run equilibrium, monopolistically competitive
firms will be earning profits.
d. In long-run equilibrium in monopolistic competition,
firms are producing a level of output where is not at
its minimum. This result is referred to as the theorem.
3. Fill in the blanks to make the following statements correct.
a. Economists say that oligopolistic firms exhibit
behaviour. These firms are aware of and take account of
the decisions of.
b. An oligopolistic firm maximizes profit by equating
and.
c. The firms in an oligopoly have a collective incentive to
output in order to maximize joint ; individually,
each firm has an incentive to output in order to
maximize individual.
d. Oligopolistic firms earn profits in the long run only if
there are significant.
e. Three examples of entry barriers that firms with market
power can create are , , and.
f. An important defence of oligopoly is the idea that it leads
to more than would occur in either perfect
competition or monopoly. The oligopolistic firm has an
incentive to because it can expect to keep a good
share of the resulting profit.
