Why is it that firms can earn profits in the long run in monopoly and oligopoly, but not in monopolistic competition and perfect competition?

Marketing Jan 11, 2021

Expert Solution

The difference in long-term profits comes about as a result of the limited number of players in an oligopoly and a monopoly. Monopolistic competition and perfect competition have a high number of players, which implies that the market share is primarily distributed among them. Again, the ease of entry in both monopolistic competition and perfect competition is quite high.

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