Which of the following market structures will have higher output in the long run than monopolistic competition,ceteris paribus?
A)Perfect competition.
B)Monopoly.
C)Duopoly.
D)Oligopoly.

Question

Quizplus · Accepted Answer

Perfect competition is the market structure in which a large number of small firms compete with each other to sell homogeneous products to the buyers. This competition eliminates excess economic profits and drives the price down to the equilibrium level. In the long run, firms produce at the minimum average total cost, and the industry output increases. Therefore, perfect competition has higher output than monopolistic competition in the long run. Monopoly, duopoly, and oligopoly are the market structures in which one or a few firms dominate the market and restrict output to maximize economic profits.

Which of the Following Market Structures Will Have Higher Output