Purchase Solution

Characteristic of Both Monopolistic Competition and Perfect Competition

Not what you're looking for?

Ask Custom Question

Which of the following is a characteristic of both monopolistic competition and perfect competition?

1. Firms face singificant barriers to entry
2. A firm's marginal revenue curve is below its demand curve.
3. In the long run, a firm will earn zero economic profit.
4. In the long run, a firm will produce a level of output that corresponds to the minimum point of their average total cost curve.

Purchase this Solution

Solution Summary

A characteristic of both monopolistic competition and perfect competition is presented.

Solution Preview

Answer 3: In the long run, a firm will earn zero economic profit.

Since there exists "free entry and exit" in the long run in industries with monopolistic competition, in the long run the demand curve for monopolistic competition shifts inward and the firm is no longer ...

Solution provided by:
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
Recent Feedback
  • "I've posted a similar question for another course. It's post 657940, and it's a practice problem that I'd like to use for the final exam. Your help will be greatly appreciated. "
  • "thank you!"
  • "Thank you again Jayant. You are super fast. "
  • "Thank you Jayant. You are appreciated. "
  • "Again, thank you Jayant. You are wonderful. "
Purchase this Solution

Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.