In long-run equilibrium,monopolistic competitors produce at the minimum point on the average total cost curve.

Question

Quizplus · Accepted Answer

In the long-run equilibrium, monopolistic competitors produce at a point where price equals average total cost, which is not necessarily the minimum point on the average total cost curve. This is because monopolistic competitors have some degree of market power, which allows them to charge a price higher than marginal cost in order to make a profit.

In Long-Run Equilibrium,monopolistic Competitors Produce at the Minimum Point on the Average