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Short Run to Long Run

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Carefully explain what will happen as we move from the short run to a long run equilibrium in a monopolistically competitive industry if firms are making a positive profit in the short run. Your explanation should clearly state what will happen to the demand curve facing an individual firm and the reason why this happens.

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Short Run to Long Run

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If firms are making profits (i.e. price > average total cost) => everyone else will know about this => others will want to ...

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