intangible aspects of the product, and perceptions of the product.

The perceived demand curve for a monopolistically competitive firm is downward-sloping, which shows that it

is a price maker and chooses a combination of price and quantity. However, the perceived demand curve for a

monopolistic competitor is more elastic than the perceived demand curve for a monopolist, because the

monopolistic competitor has direct competition, unlike the pure monopolist. A profit-maximizing

monopolistic competitor will seek out the quantity where marginal revenue is equal to marginal cost. The

monopolistic competitor will produce that level of output and charge the price that the firm’s demand curve

indicates.

If the firms in a monopolistically competitive industry are earning economic profits, the industry will attract

entry until profits are driven down to zero in the long run. If the firms in a monopolistically competitive
{"file_type": ".pdf", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_name": "Microeconomics3e.pdf", "total_pages": 597, "file_size_mb": 26.99, "creator": "PDFMiner", "batch_upload": true, "uploaded_via": "batch_uploader", "moddate": "2022-12-07T14:23:05-06:00", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "title": "Principles of Microeconomics 3e", "upload_timestamp": "2026-02-07T15:37:44.339247", "creationdate": "2022-12-07T14:15:44-06:00", "producer": "Prince 14.2 (www.princexml.com)"}