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    long-run economic profits

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    Under the conditions of monopolistic competition, if a firm is earning economic profits in the short run:
    a. prices are higher in the long run than in the short run.
    b. firm profits are higher in the long run than in the short run.
    c. average costs of production are higher in the long run than in the short run.
    d. long-run economic profits are positive.

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    Solution Preview

    d. long-run economic profits are positive.
    This is because in a monopilstically competitive firm, there are no barriers to entry ...

    Solution Summary

    Long-run economic profits are described.

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