Which of the following is a difference between a monopolistically competitive market and a monopoly in the long run?

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, firms have some degree of market power due to product differentiation, but there are also many close substitutes available. As a result, in the long run, firms in a monopolistically competitive market will earn zero economic profits as new firms enter the market and existing firms lose customers. On the other hand, a monopoly has complete market power and can charge a price higher than marginal cost in the long run, resulting in positive economic profits. Therefore, choice A is the correct answer. Choice B is incorrect because a monopolist will earn positive economic profits in the long run. Choices C and D are both incorrect because both monopolistically competitive firms and monopolists charge a price higher than marginal cost in the long run.

Which of the Following Is a Difference Between a Monopolistically