1. Given the product differentiation, it should be clear that firms in monopolistic competition compete through ?
- Non-price competition
- Price competition
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2. What is monopolistic competition?
- Monopolistic competition is a market structure with many firms producing a differentiated product where there are few barriers to entry and exit
- Monopolistic competition is a market structure with a single firm in the industry
3. In both short run and long run - in terms of allocative efficiency...
4. In monopolistic competition, is being productive efficiency achieved?
- Productive efficiency is not being achieved, since in the short run and long run, the firm is operating on the downward-sloping part of the AC curve
- Productive efficiency is being achieved, since in the short run and long run, the firm is operating at the lowest point of the AC curve
5. Firms in monopolistic competition are only going to make what profit in the long run?
- Normal profit
- Abnormal profit
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