Long run equilibrium of a firm under monopoly, Managerial Economics

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Long run Equilibrium of a Firm under Monopoly

In the long run, firm has the time to adjust his plant size or to employ existing plant so as to maximise profit. Long run equilibrium of the monopolist is displayed in figure.

2090_Long run Equilibrium of a Firm under Monopoly.png

Figure: Long run equilibrium of a firm under monopoly

Monopolist is in equilibrium at OL output where LMC cuts MR curve. He would charge OP price as well as earn an abnormal profit equal to TPQH.


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