Long-run economic profits are most likely to be earned in
A) perfect competition and oligopoly.
B) perfect competition and monopoly.
C) monopoly and oligopoly.
D) oligopoly and monopolistic competition.
E) perfect competition and monopolistic competition.

Question

Quizplus · Accepted Answer

Long-run economic profits are most likely to be earned in monopoly and oligopoly because both market structures have barriers to entry that limit competition, allowing the firms in the market to enjoy higher profits. In perfect competition, firms have no market power and face intense competition, leading to zero economic profits in the long run. In monopolistic competition, firms have some market power but also face significant competition, leading to only short-term economic profits.

Long-Run Economic Profits Are Most Likely to Be Earned in