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    PriceOutput Determination Short-Run

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    Darwyn Mendoza
    This figure illustrates monopolistic competition in the short run by showing a firm's marginal revenue and marginal cost curves. The firm chooses its profit-maximizing quantity of output where marginal revenue equals marginal cost. This occurs at a price above the firm's average total cost, allowing the firm to earn economic profits in the short run under monopolistic competition. However, in the long run, these profits will attract new firms and competition will drive the market price down to each firm's average total cost.

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    PriceOutput Determination Short-Run

    Uploaded by

    Darwyn Mendoza
    133 views2 pages
    This figure illustrates monopolistic competition in the short run by showing a firm's marginal revenue and marginal cost curves. The firm chooses its profit-maximizing quantity of output where marginal revenue equals marginal cost. This occurs at a price above the firm's average total cost, allowing the firm to earn economic profits in the short run under monopolistic competition. However, in the long run, these profits will attract new firms and competition will drive the market price down to each firm's average total cost.

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    Economics

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    This figure illustrates monopolistic competition in the short run by showing a firm's marginal revenue and marginal cost curves. The firm chooses its profit-maximizing quantity of output where marginal revenue equals marginal cost. This occurs at a price above the firm's average total cost, allowing the firm to earn economic profits in the short run under monopolistic competition. However, in the long run, these profits will attract new firms and competition will drive the market price down to each firm's average total cost.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    133 views2 pages

    PriceOutput Determination Short-Run

    Uploaded by

    Darwyn Mendoza
    This figure illustrates monopolistic competition in the short run by showing a firm's marginal revenue and marginal cost curves. The firm chooses its profit-maximizing quantity of output where marginal revenue equals marginal cost. This occurs at a price above the firm's average total cost, allowing the firm to earn economic profits in the short run under monopolistic competition. However, in the long run, these profits will attract new firms and competition will drive the market price down to each firm's average total cost.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
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    FIGURE 15.3 Monopolistic Competition in the Short Run


    Price/Output Determination in the
    Short Run
    Price/Output Determination in the
    Short Run
    FIGURE 15.3 Monopolistic Competition in the Short Run

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