Chapter 57, Problem 6MCQ

To determine

Two market structures that are characterized by free entry and exit in long-run

Explanation of Solution

Oligopoly and monopolistic competition are the two-market structure which are characterized by free entry and exit in long-run

Therefore, the correct option is b.

Economics Concept Introduction

Introduction:

Many companies or firms are present in the monopolistically competitive industry who sells similar but differentiated products in the market. Here, firms are free to enter.

In oligopoly, there are few firms and they experience economies of scale, firms have price or market power and they need to collude.