Firms A and B have identical cost curves and operate in markets with similar market demand curves.Firm A operates in perfect competition,and firm B operates in monopolistic competition.In the long run,firm A will charge _____ and produce _____ than firm B.

Question

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In the long run, a perfectly competitive firm (Firm A) will charge a lower price and produce more output than a monopolistically competitive firm (Firm B) because Firm A is a price taker and produces at the point where price equals marginal cost, while Firm B has some market power and produces at a point where price is greater than marginal cost.

Firms a and B Have Identical Cost Curves and Operate