Answer to Question #75839 in Microeconomics for jess

Question

A monopolistic competitor is like a perfectly competitive firm in the long run because:

Answer 1

A monopolistic competitor is like a perfectly competitive firm in the long run because new companies can enter the market. The economic profit in a short-run attracts more firms to join the monopolistic competition. Moreover, monopolistic competition has no barriers for the entrance of new entities compared to the perfect monopoly.