Answer to Question #74862 in Microeconomics for Nkosi

Question

when economics profit exists for a firm, it is very feeble because

Answer 1

In the case of monopolistic competition, in the short run, firms can earn positive economic gains. This makes it feeble because new firms choose to enter the market in the long – run in pursuit of the profit opportunities. Since there is no barriers to entry existing in monopolistic competitive market, it makes it easy for new firms to enter the market in the long – run (Seager, 1917).