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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
96 Chapter 4
Let the price competition now be eliminated from the monopolistic competition. If there is no price
competition, the perceived demand curve D
P
has no existence. e rms are le with its proportional
demand curve D
F
. In the absence of active price competition, entry of new rms makes the demand
curve D
F
shi leward because market share of each rm decreases. New rms continue to enter the
industry until the demand curve D
F
shis to the position of D
F
which is tangent to the LAC curve. Any
further entry of rms will make the D’
F
shi further to the le and away from the LAC curve as shown
by the dashed demand curve D
F
. In
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Publisher Resources

ISBN: 9788131797655