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Because we don't have an industry demand and supply graph
we examine all changes from the perspective of a typical firm
within a well defined industry. (We'll put aside concerns about
industry boundaries).
To the right we show a typical firm in a monopolistically competitive
industry in long run equilibrium. Since ATC = Price profits are zero, as they must be in long run equilibrium for
any free entry industry.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved