In the long run,profits for a monopolistic competitor will be:
A) the same as the profits for a monopolist.
B) slightly less than the profits of a monopolist.
C) the same as the profits for a purely competitive firm.
D) slightly more than the profits of a purely competitive firm.

Question

Quizplus · Accepted Answer

In the long run, a monopolistic competitor will earn zero economic profit, similar to a purely competitive firm, due to the entry of new firms attracted by short-run profits, which erodes the market share and profits of existing firms.

In the Long Run,profits for a Monopolistic Competitor Will Be