Explain in detail the similarities and differences between Perfect competition and Monopolistic competition. Using completely labelled diagrams compare the equilibrium of the firms (firm in perfect competition and firm in monopolistic competition) enjoying economic profit in the short run.

In long run equilibrium, economic profits tend to zero in a perfectly competitive market and also in a monopolistically competitive market. This is true because both market structures share a crucial characteristic. What is the characteristic that causes economic profits to get pushed towards zero in both perfect competition and monopolistic competition?

What are the characteristics of monopolistically competitive markets? If the price of the product in a monopolistically competitive market increases what happens to the number of individual firms in the market and to the level of profit in the long run? Fully explain your answer.

The diagram above represents a monopolistically competitive firm. Answer the questions below.  Is this firm operating in the short-run or long-run? How do you know?  Calculate this firm’s accounting profit.  From the diagram, what is the productively efficient output for this firm?  From the diagram, economies of scale are maximized at which output level? Explain.  From the diagram, what is the allocatively efficient output for this firm? Explain.

Suppose that a company operates in the monopolistically competitive market for denim jackets. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. ? 100 PRICE (Dollars per jacket) 8 20 60 50 X ATC 20 MC MR 2 2 2 2 10 0 0 30 40 50 60 70 QUANTITY (Thousands of jackets) 10 20 80 Demand 90 100 Mon Comp Outcome Min Unit Cost

Which of these businesses are in monopolistic competition? Two clothing shops, one selling women clothing and the other selling kids clothing Two agricultural producers, each selling a variety of kinds of citrus fruit Two pet stores, one of which sells dog products and the other of which sells bird products Two phone providers, each offering benefits to customers who switch to its service

Which of the following is a characteristic of monopolistic competition? Group of answer choices Same products Competition only over price Easy entry and exit. One firm

Which of the following statements is true about the difference between monopoly and monopolistic competition? a.Monopolies always earn positive profits b.Monopolistically competitive firms have no barriers to entry or exit

Provide an example of an industry that is monopolistically competitive. Regarding average total cost at the profit maximizing output, what is the difference between perfect competition and monopolistic competition  ?

What factors hinder firms in monopolistic competition from earning economic profits in the long run?