Share This Article:

Economic Definition of long-run adjustment monopolistic competition. Defined.

Offline Version: PDF

Term long-run adjustment monopolistic competition Definition: A monopolistically competitive industry undertakes a two-part adjustment to equilibrium in the long run. One is the adjustment of each monopolistically competitive firm to the appropriate factory size that maximizes long-run profit. The other is the entry of firms into the industry or exit of firms out of the industry, to eliminate economic profit or economic loss. The end result of this long-run adjustment is two equilibrium conditions--one for profit maximization, the other for zero economic profit.

 

« monopolistic competition characteristics | long-run equilibrium conditions monopolistic competition »

Permalink: http://glossary.econguru.com/economic-term/monopolistic+competition,+long-run+adjustment

Alphabetical Reference to Over 2,000 Economic Terms