A perfectly competitive ﬁrm can become a monopoly through creative destruction.

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Creative destruction refers to the process by which new technology or innovative products replace existing products or services, leading to the decline or even extinction of existing firms. A perfectly competitive firm may not have any market power to charge a higher price than its competitors. However, through the process of creative destruction, a firm can create a new product or technology that dominates the market, making it a monopoly. This is because they have exclusive control over the innovative product or technology, allowing them to charge higher prices and earn abnormal profits.

A Perfectly Competitive ﬁRm Can Become a Monopoly Through Creative