In the long run, what do monopolistically competitive firms achieve?
A) neither allocative or productive efficiency
B) allocative, but not productive efficiency
C) productive, but not allocative efficiency
D) both allocative and productive efficiency

Question

Quizplus · Accepted Answer

Monopolistically competitive firms are not able to achieve either allocative or productive efficiency in the long run due to the presence of barriers to entry and the ability to differentiate products. They may have some degree of market power, but not enough to maximize efficiency in either area.

In the Long Run, What Do Monopolistically Competitive Firms Achieve