Use the figure below to answer the following questions. Figure 13.2.2
-Refer to Figure 13.2.2.This firm in monopolistic competition
A)is incurring an economic loss.
B)is in long-run equilibrium.
C)is making an economic profit.
D)must raise its price to maximize economic profit.
E)will make more economic profit in the long run.

Question

Use the figure below to answer the following questions.  Figure 13.2.2
-Refer to Figure 13.2.2.This firm in monopolistic competition
A)is incurring an economic loss. 
B)is in long-run equilibrium. 
C)is making an economic profit. 
D)must raise its price to maximize economic profit. 
E)will make more economic profit in the long run.

Quizplus · Accepted Answer

In monopolistic competition, long-run equilibrium occurs when firms make zero economic profit, as new firms enter the market if there are profits, driving profits down to zero.

Use the Figure Below to Answer the Following Questions