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Explain Long-Run Equilibrium of the Firm and the Group Equilibrium?

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In the short run a firm under monopolistic competition may earn super normal profit or incur loss. But in the long run, the entry of the new firms in the industry will wipe out the super normal profit earned by the existing firms. The entry of new firms and exit of loss making firms will result in normal profit for the firms in the industry. In the long run AR curve is more elastic or flatter, because plenty of substitutes are available. Hence, the firms will earn only normal profit.

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