Consider the monopolistically competitive market structure, which has some featu

Question

Consider the monopolistically competitive market structure, which has some features of a perfectly competitive market and some features of a monopoly Complete the following table by indicating whether each attribute characterizes a perfect both, or neither. Check all that apply. compe tive marke , 3 mono o stica competitive market Attributes Easy entry and exit Price equals average total cost in the long rum Few sellers Price taker Perfectly Competitive Market Monopolistically Competitive Market

Explanation / Answer

P=MC= min ATC

( NO)

Attributes Perfectly competitive Market Monopolistically Competitive Market Easy entry and exit Zero barriers ( YES ) Low barriers (YES) Price equals average total cost in long run

P=MC= min ATC

( NO)

P=ATC > MR = MC in long run (YES) Few sellers NO NO Price taker YES NO ( some pricing power)

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