A firm can earn economic profits in the short run (D)only when the market is a monopoly or monopolistically competitive.
Step-by-step explanation:
In the short run, a monopolistic competitor can maximize profit by selecting the minimum efficient scale
When price is equal to average cost, economic profits tend to be zero. Thus, although a monopolistically competitive firm may earn positive economic profits in the short term.
If the firms in a monopolistically competitive market are earning short-run economic profits, then each firm's profit will drop to normal in the long run as its demand curve shifts leftward due to entry of new firms
Monopoly: the term monopoly refers to a market where one company is the sole supplier.
Monopolistic competition: It REFERS to a type of imperfect competition where in one or two producers sell products that are differentiated from one another as goods but are not perfect substitutes for each other