Long-Run Monopolistic Competition Equilibrium Without Trade Drawn by the possibility of making profits in the short-run equilibrium, new firms enter the industry and the firm’s demand curve, d₀, shifts to the left and becomes more elastic (i.e., flatter), shown by d₁. The long-run equilibrium under monopolistic competition occurs at the quantity Q₁ where the marginal revenue curve, mr₁ (associated with demand curve d₁), equals marginal cost. At that quantity, the no-trade price, P ^A, equals average costs at point A. In the long-run equilibrium, firms earn zero monopoly profits and there is no entry or exit. The quantity produced by each firm is less than that in short-run equilibrium (Figure 6-4). Q₁ is less than Q₀ because new firms have entered the industry. With a greater number of firms and hence more varieties available to consumers, the demand for each variety d₁ is less then d₀. The demand curve D/N ^A shows the no-trade demand when all firms charge the same price.