Characteristics
Short-Run Analysis: Looks Like Monopoly
Short run: economic profit — same graph as monopoly
Long-Run Adjustment: Zero Economic Profit
Long-run: D curve shifts left until tangent to ATC → zero economic profit
Efficiency in Monopolistic Competition
Is it allocatively efficient? NO
Is it productively efficient? NO
Excess Capacity
Monopolistic Competition vs. Perfect Competition
Monopolistic Competition vs. Monopoly
The Role of Advertising
AP Exam Tips
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Common Mistakes
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