Microeconomics

When firms in monopolistic competition are earning an economic profit firms will? If the firms in a monopolistically competitive industry are earning economic profits, the industry will attract entry until profits are driven down to zero in the long run. Read more on pressbooks.oer.hawaii.edu In a market structure known as monopolistic competition, numerous businesses compete … Read more

Can a monopoly make profit in the short run? In the short run, firms in competitive markets and monopolies could make supernormal profit. However, there is one major difference. In competitive markets barriers to entry and low ? so new firms can enter the market causing lower profit. Read more on www.economicshelp.org A market structure … Read more

Would a firm earning zero economic profit continue to produce even in the long run? With free entry and exit, positive (negative) economic profits encourage firms to enter (exit) the industry. Entry and exit affect industry supply and price. In the long run, entry or exit continues until price equals long-run average cost and firms … Read more

How does a monopolistic competitor choose its profit maximizing quantity of output? A profit-maximizing monopolistic competitor will seek out the quantity where marginal revenue is equal to marginal cost. The monopolistic competitor will produce that level of output and charge the price that is indicated by the firm’s demand curve. Read more on opentextbc.ca A … Read more