FIGURE 11.8 Long-Run Equilibrium for a Monopolistically Competitive Market

In a monopolistically competitive market with N firms, firms face long-run demand D_N , marginal revenue MR_N , marginal costs M_C , and average total cost ATC. At the long-run equilibrium, the firm’s quantity is Q*_N, price P*_N is equal to average cost ATC*, and each firm earns zero economic profit.