Question

Which firms typically have zero economic profits in the long run? options: A) monopolist, perfectly competitive...

Which firms typically have zero economic profits in the long run?

options:

A) monopolist, perfectly competitive

B) perfectly competitive, monopolistically competitive

C) oligopolist, monopolistically competitive

D) perfectly competitive, oligopolist
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Answer #1

The main reason for earning zero economic profit in the long run is because of the large number of buyers and sellers in the market and having no barriers to entry and exit

Due to this many number of firms can enter and exit at any point of time

This causes a more number of suppliers as compared demand and end of earning them with zero or normal profit and these are found in two type of market that are called

Perfect competition and

Monopolistic competition

Answer is option B

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