Monopolies can ________ in the long run while monopolistically competitive firms ________ due to barriers to entry in monopoly but not in monopolistic competition.

Question

Quizplus · Accepted Answer

Monopolies can earn positive economic profits in the long run because of high barriers to entry that protect their market power. In contrast, monopolistically competitive firms cannot sustain positive economic profits in the long run due to the lack of significant barriers to entry, leading to increased competition and the erosion of any initial economic profits.

Monopolies Can ________ in the Long Run While Monopolistically Competitive