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Which of the following firms do not earn normal profits

Which of the following firms do not earn normal profits

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Answer #1

1. A firm in monopolistic competiton ( Only in short run)

Monopolistic competition in short run earn economic profits as they can differentiate their product.

2. A firm in Oligopoly ( both short run and long run)

These firms have the power to influence the prices and earn economic profits as and when they fit

3. A firm in Duopoly ( both short run and long run)

They dominate the market and control the prices and supply considerably.

4. A firm in Monopoly ( both long run and short run)

They are the sole supplier in the specific industry and enjoys full mrket power.

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