JAMB Economics 2009 Objective — Question 24

Question 24 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2009 Objective paper, with the correct answer and a full explanation.

In the long run, one of the characteristics of monopolistic competitive firms is that they

A. make abnormal profits
B. suffer losses
C. make normal profitsCorrect
D. collude with each other

Explanation

Because there is free entry and free exit in the monopolistic competitive market, they make only normal profits in the long run.

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