Which statement accurately describes the key similarities and differences between a monopoly and monopolistic competition?

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A monopolist encounters a downward-sloping demand curve, whereas a monopolistic competitor faces a highly elastic demand.A monopolist sets prices above marginal cost, but a monopolistic competitor prices goods equal to marginal cost.A monopolist can earn long-term economic profits, while a monopolistic competitor earns zero economic profits in the long run.Both monopolies and monopolistic competitors produce at the point of minimum average cost.Monopolistic competitors have significant barriers to entry, unlike monopolists.

Explanation

Monopolists can sustain economic profits over time due to barriers to entry, whereas firms in monopolistic competition face no such barriers, leading to zero economic profits in the long run. Both market structures involve downward-sloping demand curves, but only monopolies maintain long-run profits. Additionally, neither necessarily produces at the efficient scale.