If a monopolistically competitive firm is producing 2,000 units of output and at this output level, the price is $10 and the average total cost is $10, it is not possible for the firm to be in long- run equilibrium.

Question

Quizplus · Accepted Answer

In long-run equilibrium, a monopolistically competitive firm produces at a level where price equals average total cost, allowing it to break even, which is the scenario described.

If a Monopolistically Competitive Firm Is Producing 2,000 Units of Output