In the short run, a firm in a monopolistically competitive industry has a cost function equal to C(Q) = 300 + 5Q where Q is annual output, so the firm's annual fixed cost is 300 and its marginal cost is 5. Each firm in the industry has its own demand equal to Q_D = 100 4P, so its inverse demand is P = 25 0.25Q_D, and its revenue is Q_D(25 0.25Q_D), and its marginal revenue is 25 0.5Q_D.

(c) Assuming new firms have the same costs and can expect the demand to be the same for them as it is for existing firms, can new firms profitably enter this industry?