Short-Run Equilibrium in Monopolistic Competition Differs from That of Monopoly

question 46

True/False

Short-run equilibrium in monopolistic competition differs from that of monopoly because the monopolistic competitor can make losses in the short run,while in a monopoly,profits will always be zero or positive.

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Definitions:

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in a stable market condition.

Equilibrium Quantity

The quantity of a good or service at which demand and supply are equal at a particular price level, leading to a stable market situation.

Quantity Supplied

The quantity of a product or service that suppliers are prepared to offer for sale at a particular price during a certain timeframe.

Minimum Wage

The lowest legal amount that an employer is permitted to pay an employee for work, usually set by government policy.