Figure 10.4 shows the demand, marginal revenue, and cost curves for a monopolistic competitor. In the long run, the firm can expect:
Figure 10.4

Question

Figure 10.4 shows the demand, marginal revenue, and cost curves for a monopolistic competitor. In the long run, the firm can expect:​ ​
Figure 10.4
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Quizplus · Accepted Answer

In the long run, monopolistic competitors can only earn zero economic profit because of the presence of low entry barriers, which allow new firms to enter the market and compete away any profits. In this case, the demand and marginal revenue curves intersect the average total cost curve at a quantity where economic profit is zero. Therefore, the firm can expect to earn zero economic profit in the long run.

Figure 104 Shows the Demand, Marginal Revenue, and Cost Curves for for a Monopolistic