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Microeconomics II
book

Microeconomics II

by D.N. Dwivedi
August 2011
Intermediate to advanced content levelIntermediate to advanced
368 pages
14h 51m
English
Pearson India
Content preview from Microeconomics II
Price and Output Determination Under Monopolistic Competition 93
demand curve D
P
intersects with them. Since price equals LAC at point P, no rm is making pure prot.
ere is, therefore, no incentive for new rms to enter the industry nor is there any disincentive for the
existing ones to quit the industry. e rms are, therefore, in the state of their long-run equilibrium at
point P.
It is important to note here that point P is not imaginary or coincidental. It is determined by the
intersection of the MR and MC curve determining prot-maximizing output at OQ
A
and price at PQ
A
.
At their equilibrium, rms produce and sell quantity OQ
A
at price ...
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Publisher Resources

ISBN: 9788131797655