Figure 12.1.2
-Which of the following is true in long-run equilibrium for a firm in monopolistic competition?

Name: Figure 12.1.2 -Which of the following is true in long-run equilibrium for a firm in monopolistic competition? A) MC = ATC. B) MC > ATC. C) MC < ATC. D) Any of the above may be true.
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Question

Figure 12.1.2
-Which of the following is true in long-run equilibrium for a firm in monopolistic competition?
A) MC = ATC. 
B) MC > ATC. 
C) MC < ATC. 
D) Any of the above may be true.

Quizplus · Accepted Answer

In long-run equilibrium for a firm in monopolistic competition, the firm produces at a point where marginal cost (MC) is less than average total cost (ATC), resulting in excess capacity.

Figure 12.1.2 -Which of the Following Is True in Long-Run Equilibrium for Equilibrium