Answer to Question #278866 in Economics for Sphumelele

Question

In the short run, equilibrium for monopolistically competitive firms resembles equilibrium for monopolist in that

Answer 1

Like monopolies, the suppliers in monopolistic competitive markets are price makers and will behave similarly in the short-run. Also like a monopoly, a monopolistic competitive firm will maximize its profits by producing goods to the point where its marginal revenues equals its marginal costs.