-The figure above shows the cost, marginal revenue, and demand curves of Golden Chow, a producer of dog food. The market for dog food is monopolistic competition. In the short run, Golden Chow sells 400 cans of dog food per day and makes ________. Other firms have ________ incentive to enter the industry.

Question

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Golden Chow is making an economic profit of $200 a day, which is the difference between the price it charges and the marginal cost of production. Other firms have an incentive to enter the industry because they can make a profit by selling dog food at a price below Golden Chow's price but above the marginal cost of production.

-The Figure Above Shows the Cost, Marginal Revenue, and Demand