Question

A difference between oligopolists and monopolistic competitors is that only A. monopolistic competitors collude. B. oligopolists...

A difference between oligopolists and monopolistic competitors is that only

A. monopolistic competitors collude.

B. oligopolists engage in product differentiation.

C. monopolistic competitors can form a cartel.

D. oligopolists can earn economic profit in the long run.

E. monopolistic competitors can incur losses.

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Answer #1

Option D

D. oligopolists can earn economic profit in the long run.

A cartel can be found with a fewer number of firms, and monopolistic competition has many firms so the market can not make cartel.

Oligopolists can engage in product differentiation or produce an identical product, but monopolistic competition needs to differentiate product to gain power in the market.

Oligopolist can earn economic profit in the long run because there are few firm and barrier to entry but a monopolistic market has free entry and exit, so in the long run, the firms earn zero economic profit.

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