Question

How does the​ long-run equilibrium for a monopolistically competitive market differ from the​ long-run equilibrium for a perfectly competitive​ market? One way in which monopolistically competitive markets and perfectly competitive markets differ is that in​ long-run equilibrium, monopolistically competitive firms

Answer 1

Answer:

Following are the differences between monopolistically competetive market and perfectly competetive market.

Explanation:

Overall the profit ratio for the sellers is higher in monopolistically competitive market and low in a perfectively competitive market. In monopolistically competitive market, sellers charge a price higher than marginal cost, whereas, in a perfectly competitive market, the sellers charge a price equal to the marginal cost. In long-Run, the main difference between the competitive market and the monopolistic market is the excess capacity. It is the difference between the efficient level of output and profit-maximizing level of output.