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.

Question

Quizplus · Accepted Answer

In perfect competition, there are many small firms competing against each other, resulting in low barriers to entry and exit. As a result, firms will produce at a level where they face the minimum possible average cost (MC=AC), resulting in efficient production and a high level of output in the long run. In contrast, monopolistic competition involves firms with some market power, leading to higher prices and lower output than perfect competition. Monopoly and duopoly also involve firms with significant market power, resulting in lower output than perfect competition.

Which of the Following Market Structures Will Have Higher Output