A monopolistically competitive firm is in long-run equilibrium.It is selling 50 units of output at a price of $8 per unit.It can be inferred that,at this level of output,
A) average total cost is greater than $8.
B) marginal revenue is equal to $8.
C) marginal revenue is greater than $8.
D) average total cost is equal to $8.
E) average total cost is less than $8.

Question

Quizplus · Accepted Answer

In long-run equilibrium, a monopolistically competitive firm sets its price equal to average total cost (P = ATC), so the average total cost is $8.

A Monopolistically Competitive Firm Is in Long-Run Equilibrium