Chapter 25 Monopolistic Competition Homework Questions
1. Draw a graph depicting a monopolistically
competitive firm operating at a profit.
Other things being equal, what will happen to this profit? Why? (see figure 77A on graphs page 8 and section IIIC on page 77)
2. Contrast the economic efficiency of a
purely competitive firm with one operating in a
monopolistically competitive market.
Contrast figures 73B and 77B of graphs page 8.
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