Which of the following market structures will have only normal profit in the long run?
A)Monopoly.
B)Duopoly.
C)Monopolistic competition.

Question

Quizplus · Accepted Answer

Monopolistic competition will have only normal profit in the long run because of the presence of low barriers to entry in the market. As new firms enter the market and offer similar products, the demand for existing firms' products declines, and they must lower their prices to remain competitive. This results in reduced profits and only normal profit in the long run. In contrast, monopolies and duopolies can earn economic profits in the long run due to high barriers to entry and limited competition.

Which of the Following Market Structures Will Have Only Normal