The major difference between monopolistic competition and monopoly is
A) monopoly is a price setter, and a firm in monopolistic competition is a price taker.
B) only a monopoly can make an economic profit in the long run.
C) only a firm in monopolistic competition can make an economic profit in the short run.
D) how the quantity of output is determined.
E) only firms in monopolistic competition are protected by barriers to entry.

Question

Quizplus · Accepted Answer

Only a monopoly can make an economic profit in the long run due to barriers to entry that prevent competitors from entering the market, allowing the monopolist to maintain economic profits over time. In contrast, firms in monopolistic competition face the possibility of new entrants in the long run, which can erode economic profits.

The Major Difference Between Monopolistic Competition and Monopoly Is