Answer to Question #218949 in Microeconomics for 5ty

Question

Compare and contrast features of perfectly competitive market with monopolistic competition. Explain the terms Productive efficiency and allocative efficiency with reference to monopolistic completion

Answer 1

Only one firm controls the price and supply levels of goods and services in a monopolistic market. A totally competitive market is one in which no single entity enjoys market dominance.

Productive efficiency is concerned with the most efficient means of producing commodities at the lowest possible cost. The optimal distribution of goods and services is what allocative efficiency is all about.