Asked by
Cesar de la Torre
on Oct 26, 2024
Verified
Firm A and firm B have identical cost curves and operate in markets with similar market demand curves.Firm A operates in perfect competition,and firm B operates in monopolistic competition.In the long run,firm A will charge _____ and produce _____ than will firm B.
A) less;less
B) more;more
C) more;less
D) less;more
Perfect Competition
A market structure characterized by many firms, freedom of entry and exit, homogeneous products, and perfect knowledge, leading to price taking behavior.
Monopolistic Competition
A market structure where many firms sell products that are similar but not identical, leading to competition based on quality, price, and marketing.
Identical Cost Curves
A theoretical situation where firms in a market have the same costs of production for producing any level of output.
- Compare and contrast perfect competition and monopolistic competition in regard to their pricing strategies, output levels, and long-term equilibrium states.
- Assess the differences in long-run equilibrium traits between companies in perfect and monopolistic competition.
Verified Answer
CC
Learning Objectives
- Compare and contrast perfect competition and monopolistic competition in regard to their pricing strategies, output levels, and long-term equilibrium states.
- Assess the differences in long-run equilibrium traits between companies in perfect and monopolistic competition.