Respuesta :
A monopolistically competitive industry does not display productive and allocative efficiency in either the short run, when firms are making economic profits and losses or in the long run when firms are earning zero profits.
Monopolistic competition is a sort of imperfect competition when numerous manufacturers compete with one another yet sell various items that are not exact substitutes for one another. The following traits are present in marketplaces with monopolistic competition: No company has complete influence over the market pricing because there are numerous producers and numerous consumers. Customers think that the products of rivals differ in ways other than price.
Monopolies are typically thought to have drawbacks (higher price, fewer incentives to be efficient). Monopolies, however, have a stronger capacity for funding R&D and can benefit from economies of scale (lower average costs). Because it does not produce at the minimum of its average cost curve, a monopolistically competitive firm is not productively efficient.
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