
100 Chapter 4
maximization are the same for the rms in both the kinds of the markets (i.e., MR=MC with
MC rising), equilibrium output under perfect competition is higher than that under monopo-
listic competition. For illustration, refer to Figure 4.6. e equilibrium of a rm in monopolistic
competition is determined at point P with output OQ
A
and equilibrium of a rm under perfect
competition will be at point B where equilibrium output is OQ
E
. Recall that the rms under
perfect competition face a horizontal demand curve passing though the minimum point of the
LAC curve, i.e., point B. us, the equilibrium output under monopolistic compet ...