Long run economic profits are always zero for which of the following market structures? a. Perfect...

Long run economic profits are always zero for which of the following market structures?

a. Perfect competition

b. Monopolistic competition

c. Monopolies

d. Perfect competition and monopolistic competition

e. Monopolistic competition and monopolies

f. Perfect competition, monopolistic competition, and monopolies

Solutions

Expert Solution

Answer: correct answer is D

Long run economic profit is also called normal profit. Perfect competition and monopolistic competition earns long run economic profit or normal profit in long run which will equal to zero.

Economic profit will be zero at this point when there will be no incentive to enter into the firm and down the market price .

Rahul Sunny answered 2 years ago

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