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antiseptic1488 [7]
3 years ago
6

Because this market is a monopolistically competitive market, the firm's average cost in long-run equilibrium is the long-run av

erage cost it would achieve as a firm operating in a perfectly competitive market. The production level of a monopolistically competitive firm in long-run equilibrium is the production level of a perfectly competitive firm. This difference in output is predicted by the
Business
1 answer:
Tems11 [23]3 years ago
7 0

Answer:

The correct answer is "Higher than, Lower than and Excess production theory".

Explanation:

Under Monopolistic Competition:

Average cost = 70

Production level = 50

Under perfect competition:

Average cost = 65

Production level = 70

  • Excess capacities are a circumstance where an economic performance would be less than the commodity that somehow a company might offer to that same marketplace.
  • Throughout terms of long-lasting balances, the commodity demand of such a monopolistic competition corporation is lesser than that of a complete business entity.
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