Some argue that the long-run equilibrium in a monopolistically competitive industry may well be...
Question:
Some argue that the long-run equilibrium in a monopolistically competitive industry may well be efficient since:
1) price is greater than marginal cost.
2) firms are producing output less than MES.
3) consumers value product selection.
A) 1 only.
B) 2 only.
C) 3 only.
D) 1 and 2 only.
E) 1, 2 and 3.
Monopolistic Competition:
Economists define monopolistic competition as a market of many buyers and sellers of a similar but differentiated product. Branded consumer products, such as breakfast cereal, shampoo, and toothpaste, are examples.
Answer and Explanation: 1
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View this answerThe best answer is C) - 3) only
Some argue that the long-run equilibrium in a monopolistically competitive industry may well be efficient since:
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Characteristics of Monopolistic Competition
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Chapter 7 / Lesson 11
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Monopolistic competition occurs where the products that are being sold by competing companies serve different purposes, allowing for entering and exiting the market with ease. Explore the characteristics of monopolistic competition and the factors of equilibrium and risk.
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