FIGURE 11- 2
-Refer to Figure 11- 2. Diagram D depicts long- run equilibrium for a typical firm in

Question

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Diagram D depicts the long-run equilibrium for a typical firm in a monopolistically competitive industry, where firms have some degree of market power and product differentiation. At the profit-maximizing level of output, the firm's marginal revenue equals its marginal cost, and the price is set above the firm's average total cost. In the long run, new firms can enter the market and compete away profits, leading to zero economic profits and a price equal to the firm's average total cost.

FIGURE 11- 2 -Refer to Figure 11- 2. Diagram D Depicts Long- Run