Question

Are Oligopolies more likely to earn economic profit in short term and long terms compared to other markets

Answer 1

Oligopolies can earn positive economic profit in the short run, as other markets such as perfect competition, monopolistic and monopoly can do it.But, in the long run, oligopoly has better prospects of getting positive economic profit than that of perfect competition and monopolistic competition firms. It happens due to the zero economic profit in the long run for perfect competition and monopolistic competition firms. But, in monopoly, a firm earns positive economic profit in the long run and it has higher possibility to do so in comparison to oligopoly market. An oligopoly market, firms can earn positive economic profit, but it is not better than the monopoly.