A perfectly competitive firm in a constant-cost industry produces 1,000 units of a good at a total cost of $50,000. If the prevailing market price is $48, the number of firms and the industry's output will decrease in the long run

Explain the characteristics of monopolistic competition. Explain how price and output are determined in monopolistic competition. Illustrate your answer with a graph

What will be an ideal response?

If the demand curve facing the Acme Awl Company is tangent to its average total cost curve, all of the following statements are true except one. Which is the exception?

a. Economic profit is zero. b. A normal profit exists. c. Marginal cost must exceed marginal revenue. d. Acme has excess capacity. e. Firms have no incentive to enter or leave this industry.