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Economics EE topics - Coggle Diagram

- - - - Various decisions, such as output, price, advertising are based on the decisions of other firms.
  - - - no market power
    - - abnormal profits will disappear as there are no barriers to entry
        
        Supply increases, price decreases
        
        normal profits
        
        P=C
    - - P=D=AR=MR
    - - AC>AR - short run losses
        
        firms leave the industry in the long run
        
        supply decreases, price increases
        
        P=C