Exhibit 9-3 A monopolistic competitive firm in the long run

-As represented in Exhibit 9-3,the maximum long-run economic profit earned by this monopolistic competitive firm is:

Question

Exhibit 9-3 A monopolistic competitive firm in the long run
 
-As represented in Exhibit 9-3,the maximum long-run economic profit earned by this monopolistic competitive firm is:

Quizplus · Accepted Answer

In the long run, monopolistic competitive firms will enter the market, which increases competition and reduces demand for each firm's product. This process will continue until all economic profits are eliminated and each firm earns zero economic profit. Therefore, the maximum long-run economic profit earned by this firm is zero, as shown by the point where the average total cost curve (ATC) intersects with the demand curve (D) at the minimum point of the average total cost curve.

Exhibit 9-3 a Monopolistic Competitive Firm in the Long Run