Explain How Economic Profits Are Reduced to Zero as New

question 56

Essay

Explain how economic profits are reduced to zero as new firms enter a monopolistically competitive industry.

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Definitions:

Output

The total amount of goods or services produced by a company or country.

TVC

Total Variable Cost, the sum of all variable costs (costs that vary with production volume) associated with producing a specific quantity of a good or service.

Output

The total amount of goods or services produced by a company, industry, or economic system.