In what market do the actions of any seller have a significant impact on the profits of all other sellers? A

Marketing Jan 12, 2021

In what market do the actions of any seller have a significant impact on the profits of all other sellers?

A. Oligopoly

B. Monopoly

C. Monopolistic competition

D. Perfect competition

Expert Solution

The correct option is (e).

Oligopoly and Monopoly are market structures that can earn long-run economic profits.

In other market structures, firms will earn zero economic profit in the long run. Even if firms in both markets earn economic profits, it incentivizes more firms to enter the market. More firms enter the competitive and monopolistic competition because of relatively lesser barriers to entry and exit in the market. This will drive the price down and firms in both the market will zero economic profits.

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