Comparing the long-run equilibrium of perfect competition with the monopolistic competition.
Concept Introduction:
Perfect Competition: A market structure is
All firms are producing homogeneous products with the same inputs, identical production processes and perfect information.
There is an infinite number of buyers and sellers in the market with each firm having an insubstantial market share. Each firm faces a horizontal demand curve.
There is a free entry to the industry.
Monopolistic Competition: The
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