We know that monopolistically competitive firms prevent the efficient use of resources because at the monopolistically competitive equilibrium,Hint: "efficient" is measure relative to the perfectly competitive outcome. Question 10Answer a. MR > P. b. P > MC. c. P = MC. d. P > ATC.

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter14: Monopolistic Competition And Product Differentiation
Section: Chapter Questions
Problem 7P
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We know that monopolistically competitive firms prevent the efficient use of resources because at the monopolistically competitive equilibrium,

Hint: "efficient" is measure relative to the perfectly competitive outcome.

Question 10Answer

a.
MR > P.
b.
P > MC.
c.
P = MC.
d.
P > ATC.
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