Monopolistic Competition versus Perfect Competition

In a way, long-run equilibrium in a monopolistically competitive industry looks a lot like long-run equilibrium in a perfectly competitive industry. In both cases, there are many firms; in both cases, profits have been competed away; in both cases, the price received by every firm is equal to the average total cost of production.

However, the two versions of long-run equilibrium are different—in ways that are economically significant.