A monopolistically competitive company that experiences short-term accounting profit may experience short-term economic gain, break-even point, or economic loss.
<h3>What kind of competition is monopolistic?</h3>
A form of imperfect competition known as monopolistic competition pits several producers against one another while still offering goods that are unique from one another and hence are not exact substitutes.
Beauty items are an example of monopolistic competition since there are many companies selling them, and each company sells things that are similar but not identical. These companies cannot compete on price because they may demand higher rates for the uniqueness of their products.
Therefore the correct answer is C) could earn an economic profit, break even or suffer an economic loss in the short run.
The complete question is:
A monopolistically competitive firm that earns an accounting profit in the short run?
A) must also earn an economic profit in the short run.
B) does not earn enough to earn an economic profit in the short run.
C) could earn an economic profit, break even or suffer an economic loss in the short run.
D) could earn an economic profit or break even, but could not suffer an economic loss in the short run.
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