In the short run, the monopolistic competitor is just like the perfect competitor in that

Question

Quizplus · Accepted Answer

In the short run, both monopolistic competitors and perfect competitors can earn economic profits, experience economic losses, or break even. However, monopolistic competitors have some market power and can set prices above marginal cost, unlike perfect competitors who take the market price as given. Therefore, options A and C are incorrect. Option D is also incorrect since new firms can enter the market in the long run, not necessarily the short run.

In the Short Run, the Monopolistic Competitor Is Just Like