In long-run equilibrium,a monopolistically competitive firm will
A) produce that level of output at which the firm achieves minimum long-run average cost.
B) produce that level of output for which marginal cost is greater than marginal revenue.
C) never produce that level of output at which the firm achieves minimum long-run average cost.
D) produce that level of output for which average revenue is greater than long-run average cost.
E) always earn a profit.

Question

Quizplus · Accepted Answer

In long-run equilibrium, a monopolistically competitive firm will not produce at minimum long-run average cost due to excess capacity and product differentiation.

In Long-Run Equilibrium,a Monopolistically Competitive Firm Will