+1 862 207 3288 Short run: monopolistic equilibrium in short run can ensure supernormal profits. The equilibrium quantity is decided at the point where marginal revenue and marginal cost are equal. This happens because at any point before this point marginal revenue is more than marginal cost and thus there is scope for more profits. Similarly any point after this point will have losses and hence is not the equilibrium. It is at the point where MR= MC that equilibrium is struck.
Equilibrium price is decided by tracing the price on AR curve against the equilibrium quantity.
