If we were to compare the monopolistically competitive firm's long-run outcome to that of a perfectly competitive firm, we would conclude that the monopolistically competitive firm:

Question

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In the long run, a monopolistically competitive firm produces less compared to a perfectly competitive firm because it faces a downward-sloping demand curve, leading to a higher price and lower quantity produced than in perfect competition, where firms are price takers and produce where price equals marginal cost.

If We Were to Compare the Monopolistically Competitive Firm's Long-Run