Long Period Equilibrium (or Price Determination)

In the long period there will be full equilibrium i.e. each firm will be producing equilibrium output and that there will be on tendency for the new firms to enter the industry or old ones to leave the industry Monopolistic competition resembles perfect competition since there is also free entry and exit of the firm […]

Price Determination Under Monopolistic Competition

            Each firm under imperfect competition or monopolistic competition produces different commodities, which are close substitutes. This makes the output and price policies of an individual firm or product partially dependent on the output and price policies of its rivals. In other words, the average revenue curve and the average cost curve of each firm […]