Use the following to answer question:
Figure: Firms in Monopolistic Competition
-(Figure: Firms in Monopolistic Competition)Use Figure: Firms in Monopolistic Competition.Zero economic profit will be earned if the profit-maximizing price is _____ in panel _____.
A)F; (A)
B)G; (C)H; (
D)I; (

Question

Use the following to answer question:
Figure: Firms in Monopolistic Competition 
-(Figure: Firms in Monopolistic Competition)Use Figure: Firms in Monopolistic Competition.Zero economic profit will be earned if the profit-maximizing price is _____ in panel _____.
A)F; (A)
B)G; (C)H; (
D)I; (

Quizplus · Accepted Answer

Zero economic profit will be earned when the profit-maximizing price is equal to the minimum point of the average total cost curve (ATC). Panel B shows that the minimum point of ATC is at the price level corresponding to firm H. Therefore, the correct answer is C) H; (B).

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