Refer to the diagram to the right. The diagram demonstrates that it is possible
ID: 1227873 • Letter: R
Question
Refer to the diagram to the right. The diagram demonstrates that it is possible for a monopolistic competitor to produce the productively efficient output level, Q_g if it is willing to lower its price from P_b to P_g. in the long run the monopolistic competitor produces the minimum cost output level, Q_g but in the short run its output of Q_& is not cost minimizing. in the short run the monopolistic competitor produces an output Q_b the but in the long run after it adjusts its capacity, it will produce run the alloy actively efficient output, Q_g. it is not possible for a monopolistic competitor to produce the productively efficient output level, Q_a because of product differentiation.Explanation / Answer
D)
If monopolist ever produce quantity Qa at price Pa then he wont be called as monopolist for a simple reason, Monopolies usually run for profit and they have no intrest in competing like free market.