Answer to Question #204347 in Microeconomics for ebenezer theodore

Question

One might expect firms in a monopolistically competitive market to experience greater swings in the price of their products over the business cycle than those in an oligopoly market. However, fluctuations in profits do not necessarily follow the same pattern 

Answer 1

In the monopolistically competitive firms, fluctuations in profits do not necessarily follow the same pattern because their profits do not depend on the price strategies of other firms in the market like in the oligopolistic markets