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In the long run, one of the characteristics of monopolist...

In the long run, one of the characteristics of monopolistic competitive firms is that they

A.

Make abnormal profits

B.

Suffer losses

C.

Make normal profits

D.

Collude with each other

Correct answer is B

In the long run, monopolistic firms can freely enter and exits the market, firms can make decisions independently; there is some degree of market power; and buyers and sellers have imperfect information.

The firms produce at a level where marginal cost and marginal revenue are equal. Companies in monopolistic competition will earn zero economic profit in the long run.