Both monopolistically competitive and perfectly competitive firms
A) earn normal profits in the long run.
B) achieve productive efficiency.
C) achieve allocative efficiency.
D) face downward-sloping demand curves.

Question

Quizplus · Accepted Answer

In the long run, both monopolistically competitive and perfectly competitive firms earn normal profits due to the entry and exit of firms in the market. This process drives economic profits to zero, leaving firms with just enough to cover their opportunity costs.

Both Monopolistically Competitive and Perfectly Competitive Firms