What happens to the value of V if interest rates are lower, say 5% (0.05). Again let's consider an asset that pays $10,000 profit per year.
V x 0.05 = 10,000
      V = 10,000/0.05
      V = 200,000

    Another way to think of this is to ask yourself how much you need to invest at %5 to get out $10,000 each year. It's the same computation, just another way to think about it.

    So, the value of such a barrier to entry in monopolistic competition (or any other industrial structure) reflects profits and interest rates (the opportunity cost of the investment). Lower interest rates make any given profit stream more valuable since the cost of such a profit stream increases as interest rates fall.

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