Like monopolies, the suppliers in monopolistic competitive markets are price makers and will behave similarly in the long-run. ![]() Also, since a monopolistic competitive firm has power over the market that is similar to a monopoly, its profit maximizing level of production will result in a net loss of consumer and producer surplus. It achieves neither allocative nor productive efficiency. ![]() In the long-run, a monopolistically competitive market is inefficient. Increase its capacity to produce more and.Given a long enough time period, a firm can take the following actions in response to shifts in demand: In terms of production and supply, the "long-run" is the time period when there is no factor that is fixed and all aspects of production are variable and can therefore be adjusted to meet shifts in demand. long-run: The conceptual time period in which there are no fixed factors of production.As a result, this will make it impossible for the firm to make economic profit it will only be able to break even. In the long-run, the demand curve of a firm in a monopolistic competitive market will shift so that it is tangent to the firm’s average total cost curve.Like a monopoly, a monopolastic competitive firm will maximize its profits by producing goods to the point where its marginal revenues equals its marginal costs.Like monopolies, the suppliers in monopolistic competitive markets are price makers and will behave similarly in the long-run.In terms of production and supply, the "long-run" is the time period when all aspects of production are variable and can therefore be adjusted to meet shifts in demand. ![]() In the long run, firms in monopolistic competitive markets are highly inefficient and can only break even.Įxplain the concept of the long run and how it applies to a firms in monopolistic competition
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |