Perfect competitors and monopolistic competitors both earn _____ economic profit in the long run,but perfect competitors produce at the _____ of the ATC curve,while monopolistic competitors produce _____ of the ATC curve.
A)zero;minimum point;on the downward-sloping portion
B)positive;minimum point;on the upward-sloping portion
C)negative;minimum point;at the minimum point
D)zero;downward-sloping portion;at the minimum point

Question

Quizplus · Accepted Answer

Perfect competitors and monopolistic competitors both earn zero economic profit in the long run due to firms being able to enter or exit the market. However, perfect competitors produce at the minimum point of the ATC curve where price equals marginal cost, while monopolistic competitors produce at a point where price is greater than marginal cost, but still on the downward-sloping portion of the ATC curve.

Perfect Competitors and Monopolistic Competitors Both Earn _____ Economic Profit