Question
in the long run, representative firms in monopolistically competitive markets will just break even --- that is, earn zero economic profits. Yet some firms in
in the long run, representative firms in monopolistically competitive markets will just break even --- that is, earn zero economic profits. Yet some firms in highly competitive markets manage to continue to earn economic profits indefinitely. For example, perfumes, cosmetics, and hair care firm L'Oreal, in business since 1907, remains highly profitable today, despite competing in fiercely competitive product categories. How has L'Oreal managed to stay profitable for so long (clue: they have a research and development staff of over 1000 people). please use any academic journal as a reference. Thank you
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Economics of Strategy
Authors: David Besanko, David Dranove, Mark Shanley, Scott Schaefer
6th edition
978-1118273630, 111827363X, 978-1118319185
