Asked by Victoria Nguyen on Apr 26, 2024
Verified
Monopolistically competitive and purely competitive industries are similar in that:
A) both are assured of short-run economic profits.
B) both produce differentiated products.
C) the demand curves facing individual firms are perfectly elastic in both industries.
D) there are few,if any,barriers to entry.
Economic Profits
Profits exceeding the opportunity costs of inputs, indicating that resources are likely yielding the highest value use.
Differentiated Products
Goods or services that are distinguished from each other based on quality, features, or branding, making them non-identical from a consumer's perspective.
Elastic Demand
A situation where the demand for a product is sensitive to price changes, meaning small price changes lead to large changes in quantity demanded.
- Explain the similarities and differences between monopolistic competition and other market structures.
Verified Answer
Learning Objectives
- Explain the similarities and differences between monopolistic competition and other market structures.
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