In what way does long-run equilibrium under monopolistic competition differ from long-run equilibrium under perfect competition?
A) Firms in perfect competition achieve allocative efficiency while firms in monopolistic competition achieve brand efficiency.
B) Firms in perfect competition achieve productive and allocative efficiency while firms in monopolistic competition achieve neither allocative nor productive efficiency.
C) The only difference is that in a monopolistically competitive market there are many brands to choose from while in a perfectly competitive market there is one standard product.
D) Firms in perfect competition achieve productive efficiency while firms in monopolistic competition achieve allocative efficiency.
B
You might also like to view...
A monetary system is preferable over the barter system because of the problems associated with
A) the law of diminishing marginal utility. B) the law of increasing relative costs. C) the double coincidence of wants. D) cash leakages.
What is MFN status? How does the WTO reconcile the principle of equal treatment with the preferential treatment created by regional trade agreements?
What will be an ideal response?