Suppose a current-affairs investigation reveals that in a market that was monopolistically competitive all the goods are actually homogenous, that is, there is no differentiation between them.In the short run, the market is then most likely to represent:

Question

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If all goods in a monopolistically competitive market are actually homogenous, then there is no differentiation between them. This means that consumers have no reason to prefer one product over another, and firms have no ability to charge a higher price for a differentiated product. In this case, the market becomes more similar to a perfectly competitive market, where firms are price-takers and there is no market power. Therefore, the answer is A) a competitive market.

Suppose a Current-Affairs Investigation Reveals That in a Market That