How is a monopolistically competitive market similar to a perfectly competitive market? Do monopolistically competitive markets and monopolies share any common features?
What will be an ideal response?
Monopolistically competitive markets are similar to perfectly competitive markets in that there are no barriers or restrictions on the entry of firms into the market. Monopolists and firms under monopolistic competition face a downward-sloping demand curve and have the ability to set price.
You might also like to view...
Government expenditures are considered autonomous in the model meaning that changes are the result of:
A) changes in real income. B) changes in inflation. C) changes in unemployment. D) changes in policy decisions.
The growing post-war (1945–50) economy was sustained by
(a) an expansion of government expenditures. (b) the general expansion of nearly all sectors despite the decline in government expenditures. (c) significant increases in both government and private expenditures. (d) trade deficits.