Monopolistically competitive markets have all the desirable welfare properties of perfectly competitive markets.

Question

Quizplus · Accepted Answer

While monopolistically competitive markets may have some benefits such as product differentiation and innovation, they do not have all the desirable welfare properties of perfectly competitive markets. In monopolistically competitive markets, firms have some market power and can charge prices above marginal cost, leading to less efficient outcomes and potential market inefficiencies.

Monopolistically Competitive Markets Have All the Desirable Welfare Properties of Perfectly