How is a monopolistically competitive industry like perfect competition? How is it like monopoly?
What will be an ideal response?
Monopolistic competition is like perfect competition in that there are many firms and no barriers to entry (and thus long-run economic profits will be zero). It is like monopoly in that firms sell products that are not perfect substitutes for each other, and thus firms have some market power, and prices will be above marginal cost.
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The problems of inflation are caused primarily by: a. greed on the part of sellers
b. uncertainty about inflation. c. too much incentive to lend money. d. greed on the part of union leaders. e. governments' actions to reduce the effects of inflation.
On necessities, more of the incidence of tax is
a. borne by the producer. b. borne by the consumer. c. shared equally between the producer and the consumer. d. None of the above is correct.