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The monopolistic competitor will instead produce at just that level and charge the price suggested by the demand curve for the company's product.

If firms in a monopolistic competitive industry make economic profits, the industry will attract new applicants until, in the long run, profits are reduced to zero.

• With an imperfect market structure and a high number of buyers and sellers, a monopolistically competitive market exists. In this market system, different items are offered by different sellers.
• For a monopolistically competitive corporation, such as a monopoly market, the profit-maximizing condition is marginal revenue equal to marginal cost.

The following table shows the total revenue, marginal revenue, and marginal cost for the book store from the previous question:

• The company will choose the quantity in which the contribution margin above or equals the marginal cost in the near term.
• Determine the market cost that is related to the equilibrium quantity using the demand curve.
• The average cost of manufacturing finally matches the market price. When the market price equals the average total cost, economic profits are zero.

After long-run modifications, the factory creates four units of output. At this level of output, the average total cost is

$$\begin{gathered} =\left[\frac{12.10}{4}\right] \\ =\$3.02 \end{gathered}$$

As a result, the market price is $\$3.02$, while the economic profit is $\$0$.