MC AC UN \MR, \MR D, Q, Q. D. Quantity (a) Profit induces entry; shift to zero profit Price ($)

Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter11: Marketing And Distribution
Section: Chapter Questions
Problem 5AA
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The following diagram from the textbook for a monopolistically competitive firm in the long run is probably the most complicated we studied this semester. A friend looks over your shoulder and asks "what is happening here?" In everyday language (not the fancy textbook language) explain the message in this diagram and how it might apply to his life.

 

MC
AC
\MR, \MR, D.
D.
Q, Q.
Quantity
(a) Profit induces entry; shift to zero profit
Price ($)
Transcribed Image Text:MC AC \MR, \MR, D. D. Q, Q. Quantity (a) Profit induces entry; shift to zero profit Price ($)
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