Figure 16-4

-Refer to Figure 16-4.Which of the graphs depicts a short-run equilibrium that will not encourage either the entry or exit of firms in a monopolistically competitive industry?

Name: Figure 16-4 -Refer to Figure 16-4.Which of the graphs depicts a short-run equilibrium that will not encourage either the entry or exit of firms in a monopolistically competitive industry?
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Question

Figure 16-4
 
-Refer to Figure 16-4.Which of the graphs depicts a short-run equilibrium that will not encourage either the entry or exit of firms in a monopolistically competitive industry?

Quizplus · Accepted Answer

In panel a, the firm is making a normal profit, which will not encourage either the entry or exit of firms.

Figure 16-4 -Refer to Figure 16-4.Which of the Graphs Depicts a Short-Run