Monopolistic competition characterizes an industry in which many firms offer

products or services that are similar, but not perfect substitutes. Barriers to
entry and exit in a monopolistic competitive industry are low, and the decisions
of any one firm do not directly affect those of its competitors.

 Heavy advertising and marketing is common among firms in

monopolistic competition

In the short run, a monopolistically competitive firm maximizes profit or minimizes losses by
producing that quantity that corresponds to when marginal revenue = marginal cost. If average
total cost is below the market price, then the firm will earn an economic profit.
If the competitive firms in an industry earn an economic profit, then other firms will enter the
same industry, which will reduce the profits of the other firms. More firms will continue to enter
the industry until the firms are earning only a normal profit.
Hence, the long-run equilibrium for monopolistic competition will equate the market price to the
average total cost, where marginal revenue = marginal cost,

Demand Curve For Interest Rate

Shift in Supply curve due to SLR