Pictured here is Axel. Based on current market conditions, he just opened up a p
ID: 1206212 • Letter: P
Question
Pictured here is Axel. Based on current market conditions, he just opened up a pizza restaurant that serves families with young children. Restaurants are generally considered to belong in the market structure of monopolistic competition, so under normal market conditions, Axel can expect
A) short run positive economic profits and long run zero economic profits
B) short run positive economic profits and long run positive economic profits
C) short run economic losses and long run economic losses
D) short run positive economic profits and long run economic losses
Explanation / Answer
The market structure of monopolistic competition, so under normal market conditions, short run positive economic profits and long run positive economic profits. The correct answer is option (B).