The diagram below shows a typical monopolistic-ally competitive firm when the industry is in long-run equilibrium. a.

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The diagram below shows a typical monopolistic-ally competitive firm when the industry is in long-run equilibrium.

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a. Explain why free entry and exit implies that the long-run equilibrium is at point A.
b. What is the significance of point B and price pB?
c. Explain the sense in which long-run equilibrium in monopolistic competition is less efficient than in perfect competition.
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Microeconomics

ISBN: 978-0321866349

14th canadian Edition

Authors: Christopher T.S. Ragan, Richard G Lipsey

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