Free Entry and Exit
In the long run there is free entry and exit. There are numerous firms waiting to enter the market each with its own "unique" product or in pursuit of positive profits and any firm unable to cover its costs can leave the market without incurring liquidation costs. This assumption implies that there are low start up costs, no sunk costs and no exit costs. The cost of entering and exit is very low.
Read more about this topic: Monopolistic Competition
Famous quotes containing the words free, entry and/or exit:
“It is mediocrity which makes laws and sets mantraps and spring-guns in the realm of free song, saying thus far shalt thou go and no further.”
—James Russell Lowell (1819–91)
“All mothers need instruction, nurturing, and an understanding mentor after the birth of a baby, but in this age of fast foods, fast tracks, and fast lanes, it doesn’t always happen. While we live in a society that provides recognition for just about every life event—from baptisms to bar mitzvahs, from wedding vows to funeral rites—the entry into parenting seems to be a solo flight, with nothing and no one to mark formally the new mom’s entry into motherhood.”
—Sally Placksin (20th century)
“There is no exit from the circle of one’s beliefs.”
—Keith Lehrer (b. 1936)