Since firms within a monopolistically competitive industry set output where marginal revenue is equal to marginal cost, the size of the fixed entry cost does not impact the equilibrium price.

Question

Quizplus · Accepted Answer

The size of the fixed entry cost can impact the number of firms in the industry, which in turn affects the degree of market power and competition. This can ultimately impact the equilibrium price.

Since Firms Within a Monopolistically Competitive Industry Set Output Where