Suppose coffee is sold in a monopolistically competitive market, where coffee is differentiated by coffee shop location. As firms enter in the long run and the price of coffee falls

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As firms enter in the long run, the market becomes more competitive, leading to a decrease in the price of coffee. As a result, the quantity of coffee demanded will increase, but individual coffee shops will face a decline in the quantity they are able to supply. This is because the increase in competition makes it difficult for individual shops to maintain their market share, resulting in a decrease in their output. Additionally, the average costs of production may decline due to increased competition and economies of scale, but this is not always the case. Finally, the profits of individual coffee shops may increase or decrease depending on how well they are able to adjust to the more competitive market.

Suppose Coffee Is Sold in a Monopolistically Competitive Market, Where