Exhibit 9-3 A monopolistic competitive firm in the long run As presented in Exhibit 9-3, the long-run profit-maximizing output for the monopolistic competitive firm is:

Question

Exhibit 9-3  A monopolistic competitive firm in the long run  As presented in Exhibit 9-3, the long-run profit-maximizing output for the monopolistic competitive firm is:

Quizplus · Accepted Answer

In the long run, monopolistic competitive firms will enter or exit the market until they are earning zero economic profit. This occurs when their price equals their average total cost (ATC) at the profit-maximizing output level. In Exhibit 9-3, the price level where ATC intersects with the demand curve is at a quantity of 400 units per week. Therefore, the long-run profit-maximizing output for the monopolistic competitive firm is 400 units per week.

Exhibit 9-3 a Monopolistic Competitive Firm in the Long Run