1.

Categorize the following features under two headings Perfect Competition and Monopolistic Competition. 4 Large Number of Producers, Differentiated products, Some Pricing power, Productive Efficiency in the Long run, Low Barriers, Homogeneous products, Long run Price = MC, Many producers, Zero Barriers, Productive Inefficiency in the Long run, Price Takers, Long run Price >MC.

Answer»

1. Perfect competition 

  • Large Number of Producers. 
  • Productive Eciency in the Long run 
  • Homogeneous products 
  • Long run Price = MC 
  • Zero Barriers 
  • Price Takers

2. Monopolistic competition 

  • Differentiated products 
  • Some Pricing power 
  • Low Barriers, 
  • Many producers 
  • Productive Inefficiency in the 
  • Long run Long run Price >MC


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