Unlike a monopoly, a monopolistic competitive firm in long run equilibrium is likely to produce a level of output at which
A)MR = MC.
B)P MC.
C)P = ATC.
D)resource-allocative efficiency is achieved.

Question

Unlike a monopoly, a monopolistic competitive firm in long run equilibrium is likely to produce a level of output at which
A)MR = MC.
B)P > MC.
C)P = ATC.
D)resource-allocative efficiency is achieved.

Quizplus · Accepted Answer

In long-run equilibrium, a monopolistic competitive firm produces where price equals average total cost (P = ATC), ensuring zero economic profit.

Unlike a Monopoly, a Monopolistic Competitive Firm in Long Run