Which of the following is not true about a monopolistic competitor?
A)It maximizes profit at the point where MC = MR.
B)It produces less output than a perfectly competitive firm,ceteris paribus.
C)It charges a higher price than a perfectly competitive firm,ceteris paribus.
D)It can earn economic profits in the long run.

Question

Quizplus · Accepted Answer

Monopolistic competitors can earn economic profits in the short run, but in the long run, new firms enter the market, increasing competition and driving down prices and profits. Thus, they cannot earn economic profits in the long run, making option D incorrect.

Which of the Following Is Not True About a Monopolistic