Firms in which type of market make zero economic profit in the long run?

Question

Quizplus · Accepted Answer

In both perfect competition and monopolistic competition, firms make zero economic profit in the long run. In perfect competition, this occurs because free entry and exit in the market ensure that prices will adjust to equal marginal costs and average total costs. In monopolistic competition, while firms have some control over prices due to product differentiation, the entry of new competitors erodes economic profits over time.

Firms in Which Type of Market Make Zero Economic Profit