Long-run economic profits would most likely exist in which market structure?
A)monopoly, monopolistic competition, and oligopoly
B)monopoly and oligopoly
C)monopoly and monopolistic competition
D)monopoly only

Question

Quizplus · Accepted Answer

In a monopoly, the firm is the only supplier, giving it the ability to set prices and earn long-run economic profits. In an oligopoly, there are a small number of firms competing, which can lead to collusion and the ability to earn long-run profits. However, in monopolistic competition, there are many firms competing in a market with differentiated products and low barriers to entry, making it difficult for any one firm to earn long-run economic profits. Therefore, the only market structures where long-run economic profits are likely to exist are monopoly and oligopoly.

Long-Run Economic Profits Would Most Likely Exist in Which Market