00:02
All right, so this question is asking us to analyze monopolistically competitive market structure which has some characteristics of both monopoly and competitive market.
00:11
So i'm going to complete the table by selecting whether each of the listed attributes describes competitive, monopolistically competitive market, both or neither.
00:23
So our first one, zero profit in the long run.
00:26
On that, we're going to say that that applies to both.
00:30
So we're going to check that off for both of these.
00:34
And you know, the reason being it's not specific to either one.
00:38
In a competitive market, firms can earn zero economic profit in the long run due to the presence of free entry and exit.
00:45
And then in a monopolistically competitive market, firms can also earn zero economic profit in the long run if there's enough product differentiation and competition.
00:55
All right, looking at our next one, we have price taker.
00:58
And that is going to be exclusive to competitive market.
01:03
The basic reason is in a competitive market, firms are price takers, meaning they have no control over the market price and must accept the price determined by market forces...