Perfect competitor and a monopolistic competitor
Both a perfect competitor and a monopolistic competitor choose output where MC = MR, and neither makes a profit in th elong run. How is it, then, that the monopolistic competitor produces less than a perfect competitor?
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If the Wilson Company spends $200,000 on advertising, what is the marginal revenue from an extra dollar of advertising? Is $200,000 the optimal amount for the firm to spend on advertising?
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