Advertisements
Advertisements
Question
Which two forms of market earn normal profit in the long run?
Options
Perfect competition and monopoly
Perfect competition and monopsony
Monopoly and monopolistic competition
Perfect competition and monopolistic competition
Advertisements
Solution
Perfect competition and monopolistic competition
Explanation:
Perfect competition allows for free entry and exit, limiting firms to normal earnings over time. Monopolistic competition has low entry barriers, making it easy for new enterprises to enter the market. As a result, market supply increases. Increased availability leads to price reductions by enterprises. Therefore, corporations can only earn typical profits in the long run.
APPEARS IN
RELATED QUESTIONS
Define Discriminating Monopoly.
Indian Oil Corporation Limited is an example of a/an ______.
Pick the option which does not belong to the group.
The monopolist's downward sloping demand curve means that it can increase sales only by changing a lower price.
What is meant by pure competition?
Identify the market form for the following:
Textile industry in India.
What is meant by barriers to entry?
What is the effect on price when a monopoly firm tries to sell more?
Identify the market form from the following.
Firm is a price maker.
Mention one feature of a monopoly market.
