Perfect competition and monopolistic competition are similar because under both market structures,
A) there are zero economic profits in the long run.
B) production takes place at the least-cost combination.
C) there are few firms.
D) entry is difficult.
E) differentiated products are produced.

Question

Quizplus · Accepted Answer

In both perfect competition and monopolistic competition, firms can only earn zero economic profits in the long run due to the ease of entry and exit in the market, which drives profits to a normal level.

Perfect Competition and Monopolistic Competition Are Similar Because Under Both