An important similarity between a monopolistically competitive firm and a purely competitive firm is that:

A) both face perfectly elastic demand schedules.
B) economic profit tends toward zero for both.
C) both realize productive efficiency.
D) both realize allocative efficiency.

Both monopolistically competitive and purely competitive firms tend to have economic profit approaching zero in the long run. In a perfectly competitive market, there are many firms selling an identical product, creating a price-taking situation where firms cannot charge a price that exceeds their production costs. Similarly, in a monopolistically competitive market, there are many firms selling slightly differentiated products, resulting in a downward sloping demand curve that limits a firm's ability to charge higher prices. As a result, both types of firms tend to have economic profit approaching zero in the long run. However, both types of firms may not realize productive or allocative efficiency.