Which of the following is FALSE about a comparison between a perfectly competitive firm and a monopolistically competitive firm?
A) A perfectly competitive firm has a horizontal demand curve, while a monopolistically competitive firm has a downward sloping demand curve.
B) In the short run, a perfectly competitive firm will earn zero economic profits, while a monopolistically competitive firm will earn positive economic profits.
C) Both the perfectly competitive and monopolistically competitive firm will earn economic profits equal to zero in the long-run.
D) In the long run, the perfectly competitive firm will produce at the minimum of the average total cost curve, while the monopolistically competitive firm will produce to the left of the minimum of the average total cost curve.
Answer: B
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