Unlike a perfectly competitive firm, a monopolistic competitor operates in the long run at a point at which
A)P = ATC.
B)MR = MC.
C)unit costs are not minimized.
D)profits are zero.

Question

Quizplus · Accepted Answer

A monopolistic competitor in the long run operates at a point where unit costs are not minimized due to the fact that they have some degree of market power which allows them to set prices above marginal cost, unlike in perfect competition where firms operate where P = MC = ATC, leading to minimized costs and zero economic profits in the long run.

Unlike a Perfectly Competitive Firm, a Monopolistic Competitor Operates in the Long