Is a monopolistically competitive firm productively efficient? Is it allocatively efficient? Why or why not?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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1. Is a monopolistically competitive firm productively efficient? Is it allocatively efficient? Why or why not?

 

2. What stops oligopolists from acting together as a monopolist and earning the highest possible level of profits? Is there a way for oligopolists to attempt to maximize profits? What are the risks of such attempts (and utimately, generally cause such attempts to fail)?

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In monopolistically competitive market quantity is produced less compared to perfectly competitive market. Thus an indicator that producers will supply products below their manufacturing capacity.

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