In the long run, only
Blank
______ for a pure competitor are possible, whereas a monopoly earns
Blank
______.

Question

In the long run, only 
Blank
______ for a pure competitor are possible, whereas a monopoly earns 
Blank
______.

BlackTom AI · Accepted Answer

The question presents a contrast between long-run outcomes for a pure competition against a monopoly. 
Option 1: 'normal profits; accounting profits' suggests that in the long run pure competition yields normal profits and that a monopoly earns accounting profits. While normal profits describe zero economic profit, accounting profits can still be positive due to accounting practices; this pairing is therefore inconsistent with standard long-run theory where monopolies may earn economic profits and perfectly competitive firms earn normal profits. 
Option 2: 'normal profits; economic profits' aligns with the classic dichotomy: in the long run, a purely competitive market drives firms to earn normal profits (zero economic profit) due to free entry and exit, whereas a monopoly can earn economic profits because barriers to entry prevent competition eroding those profits. This matches the theoretical separation between the two market structures. 
Option 3: 'economic profits; normal profits' would imply that pure competition yields economic profits in the long run, which contradicts the basic result of entry eliminating profits in perfect competition; monopolies earning normal profits would also be unusual since monopolies typically earn at least some economic profit in the long run if they face downward-sloping demand and barriers to entry. 
Option 4: 'economic losses; economic profits' claims pure competition leads to losses in the long run, which is incorrect under standard models where firms earn normal or economic profits depending on market conditions, and the monopoly scenario would not be described as consistently yielding only economic profits. 
Thus, after evaluating each option for consistency with long-run competitive theory and monopoly theory, Option 2 provides the coherent pairing of long-run normal profits for a pure competitor and economic profits for a monopoly.

In the long run, only Blank for a pure competitor are possible, whereas a monopoly earns Blank .

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In the long run, only Blank ______ for a pure competitor are possible, whereas a monopoly earns Blank ______.