Explain how long-run economic profits are linked to entry in ...

[B]

Explain how long-run economic profits are linked to entry in monopolistic competition and perfect competition.
 
  What will be an ideal response?

Question 2

The Internet auction site eBay is an example of a(n)
 
  A) Sealed Bid Auction.
  B) Second-Price Auction.
  C) English Auction.
  D) Both A and B.

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Answer to Question 1

In the short run, all market structures allow for positive economic profits. However, those profits can only be maintained in the long run if other firms cannot enter the industry. If they can they will enter and competition will force the price of the good down until economic profits are zero.

Answer to Question 2

D