Figure 8.2
-Figure 8.2 shows demand and costs for a monopolistically competitive firm. At the profit maximizing output level

Name: Figure 8.2 -Figure 8.2 shows demand and costs for a monopolistically competitive firm. At the profit maximizing output level
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Question

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In monopolistic competition, if a firm is earning a positive economic profit at the profit-maximizing output level, it indicates that price is above average total cost. This attracts new firms to enter the market, increasing competition.

Figure 8.2 -Figure 8.2 Shows Demand and Costs for a Monopolistically Competitive