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:
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—Jessamyn West (1907–1984)
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—Wallace Stevens (1879–1955)