The price charged by a monopolistic competitor is ________.

Question

Quizplus · Accepted Answer

Monopolistic competitors have some power over setting prices because they have differentiated products. Therefore, they tend to charge prices that are higher than the marginal cost of production to maximize profits. However, they still face competition from other similar but not identical firms, which keeps their prices lower than a monopolist. The price charged by a perfect competitor would be equal to the marginal cost of production.

The Price Charged by a Monopolistic Competitor Is ________