Under perfect competition,as in (a),price equals marginal cost, but under monopolistic competition,price exceeds marginal cost, so there is a deadweight loss as shown by the shaded area in (b). In both type of markets,entry occurs until profits are driven to zero. Under perfect competition, as in (a), price equals marginal cost, but under monopolistic competition, price exceeds marginal cost, so there is a deadweight loss as shown by the shaded area in (b). In both type of markets, entry occurs until profits are driven to zero