a. Compared to pure monopoly and pure competition, monopolistically competitive

Question

a. Compared to pure monopoly and pure competition, monopolistically competitive industries might have economic profits, they will diminish as competitors enter, and there will be productive inefficiency will have economic profits, they will remain constant as competitors enter, and there will be productive efficiency. will have economic profits, they will diminish constant as competitors enter, and there will be productive efficiency might have economic profits, they will remain constant as competitors enter, and there will be productive efficiency

Explanation / Answer

Answer
Option first
The monopolistic competitive firms might have profit in short run which attracts new firms and decreases it but the firm always produces above marginal cost so it is productively inefficient.

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