Other things being equal, which market structure is most likely to yield the greatest industry long-run economic profit?
A) monopolistic competition
B) oligopoly
C) monopoly
D) perfect competition

Question

Quizplus · Accepted Answer

In a monopoly, the firm has complete control over the market, allowing it to charge a higher price and earn higher profits in the long run. In perfect competition, profits are driven to zero, making it unlikely for a firm to earn long-run economic profit. In monopolistic competition, firms can differentiate their products, but there is still competition that limits profit. In an oligopoly, firms may collude to restrict output and raise prices, but this can be difficult to maintain in the long run. Therefore, a monopoly is most likely to yield the greatest industry long-run economic profit.

Other Things Being Equal, Which Market Structure Is Most Likely