Multiple Choice
Which of the following is a difference between a monopolistically competitive market and a perfectly competitive market in the long run?
A) Firms in a monopolistically competitive market earn zero economic profits in the long run, while firms in a perfectly competitive market earn positive economic profits in the long run.
B) Firms in a monopolistically competitive market earn zero economic profits in the long run, while firms in a perfectly competitive market incur losses in the long run.
C) Firms in a monopolistically competitive market charge a price higher than marginal cost in the long run, while firms in a perfectly competitive market charge a price equal to marginal cost in the long run.
D) Firms in a monopolistically competitive market charge a price lower than marginal cost in the long run, while firms in a perfectly competitive market charge a price equal to marginal cost in the long run.
Correct Answer:
Verified
Correct Answer:
Verified
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