Monopolistic competitive firms in the long run earn:

Question

Quizplus · Accepted Answer

In the long run, monopolistic competitive firms cannot earn positive economic profits because there is no barrier to entry and new firms will enter the market and increase competition, reducing demand and profits for existing firms. However, they may still earn normal profits or zero pure economic profits in the long run, where total revenue equals total costs, including opportunity costs. Therefore, the best choice is B, zero pure economic profits.

Monopolistic Competitive Firms in the Long Run Earn