If the demand curve for a firm in a monopolistically competitive market is shifting to the right, it will only stop shifting when:

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, the demand curve for a firm will stop shifting to the right when the firm is earning zero economic profits, which occurs when the price is equal to average total cost. This situation also implies that other firms have no incentive to exit the market, as they are covering their costs. Thus, all the given options are interconnected and true.

If the Demand Curve for a Firm in a Monopolistically