What are the characteristics of monopolistic competition? 1. low barriers to entry and exit 2. slight product differentiation Monopolistic competition diagram in the short-run Efficiencies in the short-run * not productively efficient because MC≠AC at q1 * not allocatively efficient because AR≠MC at q1 What happens in monopolistic competition in

What is productive efficiency? 1. productive efficiency is achieved at the quantity where MC=AC 2. this is when firms minimise their average costs 3. this means firms are producing the maximum possible output at the minimum possible cost 4. in the long-run, it means firms are fully able to

What are the characteristics of perfect competition? 1. no barriers to entry or exit 2. perfect information 3. identical products 4. firms are price-takers Perfect competition diagram in the short-run Efficiencies in the short-run * not productively efficient because MC≠AC at q1 * allocatively efficient because AR=MC at q1 What