Onsider a used car market in which half the cars are good and half are bad (lemons). suppose the average price of a good car is $9,000 and the average price of a lemon is $3,000. if rational buyers are willing to pay $6,000 for a used car, then sellers will agree to sell mostly lemons at this price. what is the term used to describe this situation?

Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact thatmr=mc at the optimal quantity for each firm. furthermore, a monopolistically competitive firm's average total cost in long-run equilibrium isless than the minimum average total cost. true or false: this indicates that there is a markup on marginal cost in the market for engines. true false monopolistic competition may also be socially inefficient because there are too many or too few firms in the market. the presence of the externality implies that there is too little entry of new firms in the market.