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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
106 Chapter 4
perunit of sale to the extent of BF. Since entry to the ‘product group’ is free, new rms are attracted to
the industry by the abnormal prot. When new rms enter the product group with slightly dierentiated
products, the share of each existing rm in the market is reduced. Hence, their demand curves DD
1
shis
leward. Given the LAC, the leward shi in the demand curve will continue until it becomes tangent to
LAC at point A, as shown by DD
3
in Figure 4.4A. For, till this point is reached, rms will make abnormal
prots and new rms will continue to enter the ‘product group’.
It appears from this part of analysis that the ...
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Publisher Resources

ISBN: 9788131797655