Which of the following is a similarity between perfect competition and monopolistic competition?
A) Both expect zero economic profits in the long run.
B) Both experience increasing returns to scale for a significant range of output.
C) Both charge a price in excess of marginal cost.
D) Both have differentiated products.

Question

Quizplus · Accepted Answer

In both perfect competition and monopolistic competition, firms expect to earn zero economic profits in the long run due to the entry of new firms in the market, which drives down prices to the level of average costs.

Which of the Following Is a Similarity Between Perfect Competition