Answer to Question #319915 in Microeconomics for dee

Question

illustrate the short and long run equilibrium of monopolistic competition

Answer 1

The major difference distinguishing the short‐run and the long‐run in monopolistic competitive market is that in the long‐run new companies can get into the market. This is highly probable if the companies in the market are earning positive economic profits in the short‐run.

Short run illustration is as shown below

The long run illustration is as shown below.