If a monopolistically competitive firm's demand curve is shifting to the left, it will stop shifting when:

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, firms will enter and exit the market until economic profits are zero. When a firm's demand curve shifts left, it indicates decreasing demand for its product. This process will stop when the firm is earning zero economic profit, as this is the point where there is no longer an incentive for further entry or exit in the market.

If a Monopolistically Competitive Firm's Demand Curve Is Shifting to the Left