A difference between a perfectly competitive industry and a monopoly is that
A) in the long run, firms in a perfectly competitive industry make zero economic profit and a monopoly can make an economic profit.
B) a firm in a perfectly competitive industry can perfectly price discriminate but a monopoly cannot.
C) only monopolies have an incentive to maximize profit.
D) perfectly competitive firms can have a public franchise.
E) a barrier to entry protects perfectly competitive firms in the short run and protects a monopoly in the long run.

Question

Quizplus · Accepted Answer

In the long run, firms in a perfectly competitive market will make zero economic profit due to the presence of free entry and exit, while monopolies can earn economic profit. This is because monopolies have market power and are able to set a price higher than their marginal cost, while perfectly competitive firms must sell at the market price set by supply and demand.

A Difference Between a Perfectly Competitive Industry and a Monopoly