Compare the average cost and the output in the long-run equilibrium for a monopolistically competitive firm and a perfectly competitive firm bycompleting the following table.Under...Monopolistic CompetitionPerfect CompetitionAverage CostOutput(Dollars per racquet) (Thousands of racquets per month)Because this market is a monopolistically competitive market, the firm's average cost in long-run equilibrium isaverage cost it would achieve as a firm operating in a perfectly competitive market.The output of a monopolistically competitive firm in long-run equilibrium isdifference in output is known as thethe long-runthe output of a perfectly competitive firm. Thisof a monopolistically competitive firm. 4. Comparing monopolistic competition and perfect competitionSuppose that a firm produces tennis racquets in a monopolistically competitive market. The following graph shows its demand curve (D), marginalrevenue curve (MR), marginal cost curve (MC), and long-run average cost curve (LRAC). Assume that all firms in the industry face the same coststructure.Place the tan point (dash symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next,place the purple point (diamond symbol) to indicate the point at which this firm would produce in the long run if it operated in a perfectly competitivemarket.Note: Dashed drop lines will automatically extend to both axes.PRICE, COSTS, AND REVENUE (Dollars per racquet)100908070605040302010 MC00LRACMRD10 20 30 40 5060 70 80QUANTITY (Thousands of racquets per month)90100Monopolistic Competition OutcomePerfect Competition Outcome?

In a perfectly competitive market there are large number of firms producing identical products thus…

Compare the average cost and the output in the long-run equilibrium for a monopolistically competitive firm and a perfectly competitive f completing the following table. Under... Monopolistic Competition Perfect Competition Average Cost (Dollars per racquet) Output (Thousands of racquets per month) Because this market is a monopolistically competitive market, the firm's average cost in long-run equilibrium is average cost it would achieve as a firm operating in a perfectly competitive market. the lc