how does monopolistic competition function in the short term and long term 
companies aim to produce a quantity where marginal revenue equals marginal cost to maximize profit or minimize loss when existing firms are making a profit new firms will enter the market the demand curve and the marginal revenue curve then shift new firms stop entering when all firms are making zero profit in the long run if existing firms are incurring a loss some firms will exit the market the firms stop exiting the market after all firms start making zero profit the market is at equilibrium in the long run only when there is no further exit or entry in the market or when all firms make zero profit in the long run 