Economists have long debated whether there is a significant loss of well being

Economists have long debated whether there is a

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102) Economists have long debated whether there is a significant loss of well-being to society inmarkets that are monopolistically competitive rather than perfectly competitive. Which of thefollowing offers the best reason why some economists believe that monopolistically competitivemarkets are less efficient than perfectly competitive markets?A) In contrast to perfectly competitive markets, firms in monopolistically competitive marketsdo not produce where price equals average total cost in long-run equilibrium.B) In contrast to perfectly competitive markets, firms in monopolistically competitive marketsearn economic profits in long-run equilibrium.C) In contrast to perfectly competitive markets, neither allocative efficiency nor productiveefficiency are achieved in monopolistically competitive markets.D) In contrast to perfectly competitive markets, firms in monopolistically competitive marketscan charge a price greater than average total cost in the short run.Answer: C102)Diff: 2Page Ref: 444/444Topic: Comparing Perfect Competition and Monopolistic CompetitionLearning Outcome: Micro 15: Discuss the role of differentiation in monopolistic competition in comparison toother market conditionsAACSB: Reflective Thinking103) Economists have long debated whether there is a significant loss of well-being to society inmarkets that are monopolistically competitive rather than perfectly competitive. Which of thefollowing offers the best reason why some economists believe that monopolistically competitivemarkets benefit consumers despite any loss of well-being?103)Diff: 2Page Ref: 444/444Topic: Comparing Perfect Competition and Monopolistic CompetitionLearning Outcome: Micro 15: Discuss the role of differentiation in monopolistic competition in comparison toother market conditionsAACSB: Reflective Thinking33
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