Micro Economics Competition and Entrepreneurship

Question: Discuss about the Micro Economics for Competition and Entrepreneurship. Answer: Introduction: The small business that the individual will desire to open is a restaurant that operates in a typically monopolistically competitive industry in the long-run equilibrium. The individual should not lower the price of the products that will available in the restaurant. This is mostly because; in the long-run equilibrium the restaurant will make zero profit (Nocco, Ottaviano and Salto 2014). In other words, the demand, marginal revenue, marginal cost and average total cost curve are illustrated in the following diagram. Figure: Monopolistically Competitive Market (Source: Created by Author) The three ways by which the product will be differentiated includes style, location and quality. Being a restaurant owner, the individual can differentiate its product in terms of style. In other words, they can serve coffee in porcelain cups that are to table by waiters. The food can be differentiated in terms of quality such as serving organic food (Kirzner 2015). References Kirzner, I.M., 2015.Competition and entrepreneurship. University of Chicago press. Nocco, A., Ottaviano, G.I. and Salto, M., 2014. Monopolistic competition and optimum product selection.The American Economic Review,104(5), pp.304-309.