Use the figure below to answer the following questions.
Figure 14.2.3
-Refer to Figure 14.2.3.Assume this firm faces demand curve D₂.If this firm in monopolistic competition is maximizing economic profit,

Question

Use the figure below to answer the following questions.

Figure 14.2.3
-Refer to Figure 14.2.3.Assume this firm faces demand curve D₂.If this firm in monopolistic competition is maximizing economic profit,

Quizplus · Accepted Answer

The firm is maximizing economic profit, which means it is producing the quantity where marginal cost equals marginal revenue. At this point, the firm is not making any economic losses or profits, so there is no incentive for rival firms to enter or exit the industry.

Use the Figure Below to Answer the Following Questions