Question

Monopolies, oligopolies, and monopolistic competitive industries all A) earn positive profits in the long run. B) have market power. C) are completely unconstrained in their pricing. D) raise price and quantity over what would occur in perfect competition in order to maximize their profits.

Answer 1

Answer: Option (A) is correct.

Step-by-step explanation:

Correct option: Earn positive profits in the long run.

All the industries that operates in a monopoly, oligopoly and monopolistic market conditions are generally having positive profits in the long run.

These industries can earn positive profits because there are high restrictions on the entry of the new firms. This is the case of monopoly and oligopoly. But in monopolistic competition, there are many firms in the market and the firms in this market condition can have a positive profits in the long run. There are comparatively less barriers on the entry of the new firms.