Comparing a perfectly versus monopolistic competitive market, in the long run what happens to prices and profits? a) Has equal profit and higher prices b) Has equal profit and lower prices c) Has equal profit and equal prices.

Comparing a perfectly versus monopolistic competitive market, in the long run what happens to prices and profits? a) Has equal profit and higher prices b) Has equal profit and lower prices c) Has equal profit and equal prices.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Comparing a perfectly versus monopolistic competitive market, in the long run what happens to prices and profits?

a) Has equal profit and higher prices

b) Has equal profit and lower prices

c) Has equal profit and equal prices.

Definition Definition Form of market structure in which there are a large number of sellers of a particular product, with each seller selling somewhat differentiated but close substitutes to the product sold by other sellers. Features of monopolistic competition include: Large number of buyers and sellers Differentiated products Free entry and exit of the firms in the market

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