Which of the following is true?
A)All markets should be oligopolies because that is the most efficient market structure.
B)Monopolistic competition results in excess capacity, since in the long run MR = MC is to the right of the minimum of the ATC curve.
C)Monopolistic competition is a market structure whose firms experience large economic profits in the long run.
D)Monopolistic competition is a market structure whose firms experience zero economic profits in the long run.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms can only earn normal profits (zero economic profits) in the long run due to the entry of new firms attracted by short-term profits, which erodes any economic profits.

Which of the Following Is True