Which of the following is a major difference between monopolists and firms in perfectly competitive markets?

Question

Quizplus · Accepted Answer

Monopolists may earn long-run economic profit, while firms in perfectly competitive markets cannot. This is because in a perfectly competitive market, any economic profit earned in the short-run will attract new competitors, driving prices down until firms are earning only normal profit in the long-run. However, a monopolist has the ability to restrict output and raise prices, allowing them to potentially earn economic profit in the long-run.

Which of the Following Is a Major Difference Between Monopolists