Unit 3: Are Businesses Efficient? Product Markets and Efficiency

Lesson 11a: Monopolistic Competition: Are Businesses Efficient?

Key Graphs

Monopolistic Competition in Short Run Equilibrium   Monopolistic Competition in Long Run Equilibrium - D is the profit maximizing quantity (MR=MC): What We Get - G is the allocatively efficient quantity (P=MC): What We Want - E is the productively efficient quantity (MC=ATC): Produce at a Minimum Cost

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