In the long run,economic profits are:
A) possible both for a monopolist and for a perfectly competitive firm.
B) possible for a monopolist but not for a perfectly competitive firm.
C) possible for a perfectly competitive firms but not for a monopolist.
D) impossible for both a monopolist and for a perfectly competitive firm.

Question

Quizplus · Accepted Answer

Economic profits are possible for a monopolist in the long run because they have the ability to set prices higher than their marginal cost. In contrast, in the long run, perfectly competitive firms can only earn normal profits, which is defined as revenue equaling total costs, including both explicit and implicit costs. Therefore, economic profits are not possible for perfectly competitive firms in the long run.

In the Long Run,economic Profits Are