Using illustrations distinguish between profit maximization positions of perfect competitive and monopolistic firms in the long run

Note that the curves are not random

(i) Long run-profit maximization of a firm under perfect competition.

Due to abnormal profit enjoyed by firms in the short run, many other firms are attracted to join the industry due to free entry and exist. This increases the level of output on the market and hence reduction in prices. At the same time these new firms compete for the factor inputs and hence leading to rise in in the cost of production and increase average cost. Thus in the long run the AC curve is tangential to AR curve hence the firms earn normal profit

(ii) Long –run profit maximization of a firm under monopolistic competition

New firms are attracted by abnormal profits enjoyed in the short run, as a result the new firms increase competition for firm inputs which increase AC. At the same time the increased level of output lead to fall in prices up to the point where the demand curve is tangential to AC curve. This leads to earning normal profit