In which of the following market structures can firms earn economic profits in the long run?

Question

Quizplus · Accepted Answer

In a monopoly market structure, there is only one firm providing a unique product for which there is no close substitute. Hence, in the long run, the firm can earn economic profits. In perfect competition, the presence of many firms offering homogeneous products leads to zero economic profits in the long run due to intense competition. In monopolistic competition, firms offer differentiated products, but because there are many firms, price competition limits profit margins in the long run.

In Which of the Following Market Structures Can Firms Earn