Firm A and firm B have identical cost curves and operate in markets with similar market demand curves.Firm A operates in perfect competition,and firm B operates in monopolistic competition.In the long run,firm A will charge _____ and produce _____ than will firm B.
A)less;less
B)more;more
C)more;less
D)less;more

Question

Quizplus · Accepted Answer

In the long run, a firm in perfect competition will produce at the point where price equals marginal cost, leading to lower prices and higher output compared to a firm in monopolistic competition, which faces downward-sloping demand and will produce where marginal cost equals marginal revenue, resulting in higher prices and lower output.

Firm a and Firm B Have Identical Cost Curves and Operate