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Question 3 A differentiation strategy may enable firms to earn economic profits in the short-run, but not in the long-run. Briefly explain the reason for

Question 3

  1. A differentiation strategy may enable firms to earn economic profits in the short-run, but not in the long-run. Briefly explain the reason for both of your answers (4 marks)
  2. What can a differentiating firm do to protect its long-run economic profits? (2 marks)

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