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An important similarity between a monopolistically competitive firm and a pure monopolist is that both _____: a
An important similarity between a monopolistically competitive firm and a pure monopolist is that both _____:
a. realize an economic profit in the long run.
b. achieve allocative efficiency.
c. face demand curves that are less than perfectly elastic.
d. achieve productive efficiency.
Expert Solution
The correct answer is C) face demand curves that are less than perfectly elastic.
An important similarity between a monopolistically competitive firm and a pure monopolist is that both have downward sloping demand curve, which means that, both face demand curves that are less than perfectly elastic. The demand curves of a monopolistically competitive firm and a pure monopolist firm are not horizontal to the x-axis as one can see in a perfectly competitive firm.
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