Question

The long-run equilibrium outcomes in monopolistic competition and perfect competition are similar, because in both market structures ______________.

• A. the efficient output level will be produced in the long run.
• B. firms will be producing at minimum average cost.
• C. firms will only earn a normal profit.
• D. firms realise all economies of scale.

Answer 1

Answer: (C)

firms will only earn a normal profit.

Both market structures will only earn a normal profit in long run, due to free many and exist of firms under both market.