Which of the following market structures will have lower prices in the long run than monopoly,ceteris paribus?
A)Perfect competition,oligopoly,and monopolistic competition.
B)Perfect competition,but not oligopoly or monopolistic competition.
C)Perfect competition and oligopoly,but not monopolistic competition.

Question

Quizplus · Accepted Answer

In perfect competition, there are many firms competing in the market, which drives prices down to the lowest possible level. In oligopoly, there are a few dominant firms, which may engage in price competition to gain market share. In monopolistic competition, firms differentiate their products, which may allow them to charge higher prices. Therefore, perfect competition, oligopoly, and monopolistic competition may have lower prices than monopoly in the long run, but monopolistic competition may have higher prices than perfect competition and oligopoly.

Which of the Following Market Structures Will Have Lower Prices