Which of the following is not a key feature of monopolistic competition?
A)Price above the minimum average total cost
B)Zero economic profits for firms in the long run
C)Positive economic profits for firms in the long run
D)Entry and exit in the long run

Question

Quizplus · Accepted Answer

In monopolistic competition, firms can earn positive economic profits in the short run, but in the long run, the entry of new firms erodes these profits, leading to zero economic profits. This is because the entry of new firms increases competition and reduces the market share of existing firms, driving prices down to the point where firms only earn a normal profit.

Which of the Following Is Not a Key Feature of Monopolistic