Which of the following is TRUE about a firm in monopolistic competition in the long run?
A) P = ATC
B) ATC = MC
C) P = MR
D) MC = ATC
E) P = MC

Question

Quizplus · Accepted Answer

In the long run, firms in monopolistic competition will earn normal profits, which means that their price will equal their average total cost (P=ATC). This is different from perfect competition, where firms earn zero economic profits in the long run and price equals marginal cost (P=MC) instead.

Which of the Following Is TRUE About a Firm in Monopolistic