Exhibit 9-1 A monopolistic competitive firm

As represented in Exhibit 9-1, the maximum long-run economic profit earned by this monopolistic competitive firm is:

Question

Exhibit 9-1 A monopolistic competitive firm

As represented in Exhibit 9-1, the maximum long-run economic profit earned by this monopolistic competitive firm is:

Quizplus · Accepted Answer

In the long run, new firms will enter the market due to the presence of economic profits, leading to an increase in competition and a decrease in demand for each individual firm. This will cause the demand curve to become more elastic and the firm's economic profits to decrease until they are eventually driven to zero. Therefore, the maximum long-run economic profit earned by this monopolistic competitive firm is zero.

Exhibit 9-1 a Monopolistic Competitive Firm