Refer to the information provided in Figure 15.1 below to answer the question(s) that follow. Below are cost curves for Dom's Barber Shop, a monopolistically competitive firm. Figure 15.1
-Refer to Figure 15.1. In this industry, in the long run

Question

Refer to the information provided in Figure 15.1 below to answer the question(s) that follow. Below are cost curves for Dom's Barber Shop, a monopolistically competitive firm.  Figure 15.1
-Refer to Figure 15.1. In this industry, in the long run

Quizplus · Accepted Answer

In the long run, firms will enter the market if existing firms are earning economic profits, leading to an increase in supply, a decrease in the market price, and a reduction in profits per firm until only a normal profit is earned. This process ensures that in the long run, firms in competitive markets will earn just a normal profit, as any economic profits attract new entrants, which then erodes these profits.

Refer to the Information Provided in Figure 15