Although the long run equilibrium of a monopolistically competitive markets involves zero economic profit like perfect competition, the outcome is deemed to be inefficient. Why is that the case? Are there desirable characteristics of monopolistic competition that potentially balance some of the inefficiencies?
Although the long run equilibrium of a monopolistically competitive markets involves zero economic profit like perfect competition, the outcome is deemed to be inefficient. Why is that the case? Are there desirable characteristics of monopolistic competition that potentially balance some of the inefficiencies?
Chapter14: Monopolistic Competition And Product Differentiation
Section: Chapter Questions
Problem 17P
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Although the long run equilibrium of a monopolistically competitive markets involves zero economic profit like
perfect competition, the outcome is deemed to be inefficient. Why is that the case? Are there desirable
characteristics of
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