False , because exit and entry from a monopolistic competition occur in the long run rather than the short run, and because profit is the stated measure of how much competition there is in the long run.
what is monopolistic competition?
- A form of imperfect competition known as monopolistic competition pits several producers against one another while still providing goods that are distinguishable from one another (for example, by branding or quality) and are thus not exact replacements.
- In monopolistic competition, a corporation accepts the prices set by its competitors as given and pays no attention to how its own prices affect those of its rivals.
- Monopolistic competition will turn into a government-granted monopoly if this occurs in the face of a coercive government. In contrast to ideal competition, the business keeps extra capacity.
- Industry models frequently adopt monopolistic competition models. Restaurants, cereals, apparel, shoes, and service sectors in big cities are a few examples of businesses with market systems resembling monopolistic rivalry from textbooks.
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