question archive Suppose a firm in monopolistic competition is in long-run equilibrium
Subject:AccountingPrice: Bought3
Suppose a firm in monopolistic competition is in long-run equilibrium. Using diagrams, explain what is the effect on the firm's output, price and profit in the short run and in the long run of:
A) a rise in the firm's fixed costs of production, eg an increase in rent
B)a decrease in the firm's variable costs of production, eg a reduction in wages.