Consider the following statement: "A monopolistically competitive market in which there are no entry barriers will have the identical long-run equilibrium as if the market were perfectly competitive." Is this statement correct?
◦ Yes, in the absence of entry barriers, firms in the monopolistically competitive market will expand until they are producing at the minimum of their LRAC curves, just as in perfect competition.
◦ No, because firms in the monopolistically competitive market do not produce at an output level where MC = MR, as in perfect competition, which leads to a different price and output in long-run equilibrium.
◦ Yes, in the absence of entry barriers, new firms enter the industry until industry price and output are identical to perfect competition.
◦ No, firms in the monopolistically competitive market earn economic profits in the long run because they are facing a downward-sloping demand curve, whereas in perfect competition they earn zero profits.
◦ No, because firms in the monopolistically competitive market will not reach their minimum efficient scale as they would in perfect competition - the result is higher prices and lower output.
An example of a late entry to the medical record.
Competitive inhibitor
Effects of competitive inhibition on enzyme kinetics
The WISER entry for hydrogen cyanide (bottom). Useful information includes detailed health ...
Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ...
Regulation of Bacteriophage Entry into the Lytic or Lysogenic Cycle