Which of the following statements are true about both monopolistic competition and monopoly? Check all that apply.

A. Price is above marginal cost.
B. Firms can earn positive profit in the long run.
C. Firms are not price takers.
D. Price equals average total cost in the long run.

Monopolistic competition and monopoly share similarities and differences. In both, firms are not price takers, but in a monopoly, the price is set above marginal cost leading to positive profit, while in monopolistic competition, firms can only make short-term profits. Both can continue operations in the short run if price covers variable costs, but in the long run, monopolies can earn positive economic profit, unlike firms in monopolistic competition.

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Which of the following statements are true about both monopolistic competition and monopoly? Check all that apply.A. Price is above marginal cost.B. Firms can earn positive profit in the long run.C. Firms are not price takers.D. Price equals average total cost in the long run.

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Other Questions

Which of the following statements are true about both monopolistic competition and monopoly? Check all that apply.

A. Price is above marginal cost.
B. Firms can earn positive profit in the long run.
C. Firms are not price takers.
D. Price equals average total cost in the long run.