Which of the following features is common to both perfectly competitive markets and monopolistically competitive markets?
A) Firms produce homogeneous goods.
B) Prices are equal to marginal costs in the long run.
C) Long-run profits are zero.
D) Prices are above marginal costs in the long run.

Question

Quizplus · Accepted Answer

Both perfectly competitive markets and monopolistically competitive markets have the characteristic of long-run profits being zero. However, A, B, and D are not features common to both markets.

Which of the Following Features Is Common to Both Perfectly