A monopolistically competitive firm and a monopoly are alike because both I. face downward sloping demand curves.
II) have marginal revenue curves that lie beneath their demand curves.
III) can make an economic profit in the long run.

Question

Quizplus · Accepted Answer

Both monopolistically competitive firms and monopolies face downward sloping demand curves (I) and have marginal revenue curves that lie beneath their demand curves (II). However, only monopolies can make an economic profit in the long run, as monopolistically competitive firms face competition that erodes profits over time.

A Monopolistically Competitive Firm and a Monopoly Are Alike Because