Monopolies and monopolistically competitive firms generally make the same amount of profit in the short run.

Question

Quizplus · Accepted Answer

Monopolies can earn persistent economic profits due to lack of competition and barriers to entry, while firms in monopolistic competition face competition and can only earn economic profits in the short run, which tend to be eliminated in the long run due to new entrants and competition.

Monopolies and Monopolistically Competitive Firms Generally Make the Same Amount