Long-run economic profits are possible in which of the following market structures?

Question

Quizplus · Accepted Answer

Long-run economic profits are possible in oligopoly because few firms control the market and can engage in strategic behavior such as price-fixing or limiting output to maintain high profits. In monopolistic competition, long-run economic profits are not possible because firms have little control over the price and must compete on other factors such as product differentiation. In perfect competition, firms cannot make long-run economic profits because they are price-takers and must sell at the market price, which equals their average cost of production.

Long-Run Economic Profits Are Possible in Which of the Following