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From course:

Economics A Level (DONEEEEEEE)

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Question:

Why can Prices be Higher in a Monopolistic Industry than a Perfect Competition Industry?

Author: eric_galvao



Answer:

-The Monopolistic Firm is not Producing on the AC lowest Point, so it can lead to Higher Prices being Charged -This is because the Monopolistic Firm needs to Differentiate their Product and have Advertising -Monopolistic Firms also Restrict Output to Max Profit. Economies of Scale do not Benefit them as much


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