Equilibrium of firm in short run under monopolistic competition
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Heya....
Monopolistic firm is that firm in which there are large no of buyers and sellers of a same product but the product of each seller is different from other one....
Equilibrium in monopolistic is exist when...
demand = supply....
It can be possible that with the be price control law of demand also exist...
Means,,,, producer will not rise it's price up to limits that consumer will shift to other and it reduces its supply..
So at that firm consumer will shift it will get maximum profit in short run untill other firm also not decrease it's price..
Monopolistic firm is that firm in which there are large no of buyers and sellers of a same product but the product of each seller is different from other one....
Equilibrium in monopolistic is exist when...
demand = supply....
It can be possible that with the be price control law of demand also exist...
Means,,,, producer will not rise it's price up to limits that consumer will shift to other and it reduces its supply..
So at that firm consumer will shift it will get maximum profit in short run untill other firm also not decrease it's price..
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