Question:
Why can Dynamic Efficiency not be Achieved in a Monopolistic Competition?
Author: eric_galvaoAnswer:
-The Amount of Time the New Firms force All Firms in a Monopolistic Market to make Normal Profit = Time for Firms already in the Market to make a Supernormal Profit -Supernormal Profit provide as a Reward for Investing or Innovation -Lack of Barriers however means the Firms are not Likely to Invest Lots onto New Innovations, so Less Dynamic Efficiency -In the Long Run, there will not be a Lot of Money left for Investment
0 / 5 Â (0 ratings)
1 answer(s) in total