The broccoli market is perfectly competitive.This means that the price of broccoli is _____ than if the market were monopolistically competitive,and the total broccoli output in the market is _____ than if it were monopolistically competitive.

Question

Quizplus · Accepted Answer

In perfectly competitive markets, price is determined solely by supply and demand interactions, resulting in lower prices. In contrast, monopolistically competitive markets usually have higher prices due to more differentiated products and limited competition. Total output in a perfectly competitive market is typically higher because there are many small firms producing, whereas monopolistically competitive markets have fewer firms with greater market power, and thus the output is lower.

The Broccoli Market Is Perfectly Competitive