A monopolistically competitive firm is similar to
A) a perfectly competitive firm in the short run because it cannot make an economic profit in the short run and is similar to a monopoly in the long run because it can make an economic profit.
B) a perfectly competitive firm because its economic profit is equal to zero in both the short run and long run.
C) a monopoly because it can make an economic profit in both the short run and long run.
D) a monopoly in the short run because it can make an economic profit in the short run and is similar to a perfectly competitive firm in the long run because it cannot make a positive economic profit.
Correct Answer:
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A)
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