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Harrison Macdonald
on Nov 26, 2024

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The economic profits earned by monopolistically competitive sellers are zero in the long run.

Economic Profits

The difference between a firm's total revenue and its total costs, including both explicit and opportunity costs.

Monopolistically Competitive

Describes a market structure in which many firms sell products that are similar but not identical, allowing for some degree of market power.

Long Run

A period in which all factors of production and costs are variable, allowing firms the flexibility to adjust all inputs.

  • Grasp why monopolistically competitive firms earn zero economic profits in the long run.
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JB
Janeigh BakerNov 29, 2024
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