Like firms in perfect competition,firms in monopolistic competition will earn zero economic profit in the long run.

Question

Quizplus · Accepted Answer

In the long run, firms in both perfect competition and monopolistic competition will earn zero economic profit as new firms will enter the market, increasing competition and reducing demand for existing firms. In monopolistic competition, firms may still earn some level of profit in the short run due to product differentiation and brand loyalty, but in the long run, profits will be driven to zero.

Like Firms in Perfect Competition,firms in Monopolistic Competition Will Earn