The local hairdresser industry has the market structure of monopolistic competition. Your hairdresser boasts that he is

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The local hairdresser industry has the market structure of monopolistic competition. Your hairdresser boasts that he is making a profit and that if he continues to do so, he will be able to retire in five years. Use a diagram to illustrate your hairdresser's current situation. Do you expect this to last? In a separate diagram, draw what you expect to happen in the long run. Explain your reasoning.
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Microeconomics

ISBN: 978-1429283434

3rd edition

Authors: Paul Krugman, Robin Wells

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