Question

If a perfectly competitive firm and a monopolistic competitor in long run equilibrium face exactly the same demand and cost curves, then there is high probability that the former will earn zero economic profits, but the latter will earn positive economic profits. both will earn zero economic profits, but the former will attain lower unit costs than the latter. both will earn zero economic profits, but the latter will attain lower unit costs than the former. both firms will earn zero economic profits, and attain the lowest possible unit costs. neither form will earn zero economic profits, but both will attain the lowest possible unit costs.

Answer 1

A perfectly competitive firm and a monopolistic firm in the long-run equilibrium face exactly the same demand and cost curves, then they will also earn zero economic profits, and attain the lowest possible unit costs (D).

Economic profit is the total revenue minus the total cost of a product produced by a firm. Cost in this term include the measurement of oppotunity cost.

Perfectly competitive firm is a firm in a market with many buyers and sellers and the price of products represents the equililbrium point between supply and demand. A firm in this market has almost no power to affect the product price.

In the long-run, a perfectly competitive firm will earn 0 (zero) economic profit, while earn accounting profits. This condition happens because entry and exit barriers for firms in perfect competitive market is low. Many firms can easily enter and exit the market.

Monopolistic firm is a firm in a market where many firms are producing similar but differentiated products. The entry barriers for thiis market is relatively low and the decisions of any firm do not dirrectly affecting its competitor within the market.

In the long-run, monopolistic firm will earn zero economic profits because the low entry barriers easily allows new competitors to join the market and reduce an old-player firm's demand. This condition push a firm to make its demand curve to be more elastic. Any change in the demand curve will also affecting a firm's marginal revenue curve as well. This situation then leads a firm to no-longer make an economic profit condition.

However, to ensure their sustainability in their respective markets, both firms will attain the lowes possible unit costs to earn accounting profits.

Learn more about Perfect Competition and Monopolistic Markets here: brainly.com/question/29454493

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