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Question
In the long run monopolistic competitive firms make the same type of profits as _______________.
In the long run monopolistic competitive firms make the same type of profits as _______________.
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Solution
The correct option is C perfect competition
Due to free entry and exit in the industry, the industry supply is altered in the long run and the price is adjusted to the point where P = AC at the point MC = MR and the firms make normal profits in the long run.
Due to free entry and exit in the industry, the industry supply is altered in the long run and the price is adjusted to the point where P = AC at the point MC = MR and the firms make normal profits in the long run.
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