In the long run the monopolistic competitor ________ at peak efficiency and the perfect competitor ________ at peak efficiency.

Question

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In the long run, a monopolistic competitor does not operate at peak efficiency due to product differentiation and some degree of market power, which can lead to excess capacity or higher than minimal costs. In contrast, a perfect competitor operates at peak efficiency because the market structure ensures that firms produce at the lowest average cost and price equals marginal cost.

In the Long Run the Monopolistic Competitor ________ at Peak