Which of the following explains why firms in competitive price-searcher and competitive price-taker markets will both have zero economic profits in the long run but a monopoly will not?
A) There is always more than one firm in competitive price-searcher and competitive price-taker markets.
B) Both competitive price-searcher and competitive price-taker markets are characterized by firms producing identical goods, but a monopoly is not.
C) In both competitive price-searcher and competitive price-taker markets, the barriers to entry are low; this is not true under a monopoly.
D) A monopoly firm has a downward-sloping demand curve; firms in the other types of markets do not.
Correct Answer:
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