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Both the Perfectly Competitive Firm and the Monopolistically Competitive Firm

question 127

Essay

Both the perfectly competitive firm and the monopolistically competitive firm produce at the output where marginal revenue equals marginal cost (MR = MC)but only the perfectly competitive firm achieves allocative efficiency.Explain why this is the case.


Definitions:

Progression Principle

In fitness and training, the idea that the intensity and duration of exercise should increase gradually over time for optimal improvement.

Need for Power

An individual's desire to influence, control, or have authority over others.

Social Power

The ability of an individual or group to influence or control others within a social or organizational context.

Personal Gratification

The feeling of pleasure or satisfaction that comes from achieving something, enjoying an activity, or fulfilling a desire.

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