What type of profit can a firm in monopolistic competition make in the long run? Explain your answer
What will be an ideal response?
In the long run, a firm in monopolistic competition can make only zero economic profit. It cannot make an economic profit because there are no barriers to entry. If a firm in monopolistic competition is making an economic profit, in the long run new firms enter the market, produce a similar product, and decrease the demand for the initial firm's product. Entry continues until the firms make zero economic profit, that is, their owners make a normal profit.
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Which of the following are assets of commercial banks?
i. reserves ii. loans iii. deposits A) i only B) ii only C) i and ii D) ii and iii E) i, ii, and iii
The effect of a legal minimum wage set above the equilibrium wage rate is
A) an excess quantity of labor demanded. B) an excess quantity of labor supplied. C) an increase in the quantity of labor demanded. D) a decrease in quantity of labor supplied.