Discuss How an ESS Works

question 48

Essay

Discuss how an ESS works.

Distinguish between the short-term and long-term equilibrium outcomes in monopolistic competition.

Evaluate the role and outcomes of economic profits in monopolistic competition.

Understand the basic concepts of monopolistic competition, including how firms compete on price and non-price factors.

Recognize how firms in monopolistic competition determine their optimal level of output and price to maximize profits.