I am studying the part of monopolistically competitive markets. All materials say that in the long-run, the economic profit will be zero. Because the demand curve will tangent with the ATC curve, and this point has the same abscissa (quantity) as the intersection of MR and MC. I don’t know why they have the same abscissa? I think it is possible that they don’t have the same abscissa, and therefore, even though the demand curve tangents with the ATC curve, the economic profit will not be zero.
The logic is that if a company in such market is generating profit, competitors will enter to have a share of that profit. Hence in the long run, there will be no more profits to share as too many competitor will drive down prices and this will equal the atc
Thank you so much!