In the long run, in a monopolistically competitive market, price will be

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In the long run, in a monopolistically competitive market, firms will produce where price equals average total cost (ATC) in order to maximize profits. This is because in the long run, firms have enough time to adjust their output and inputs. Unlike in the short run where firms can make abnormal profits by charging a price above their marginal cost (MC), in the long run new firms can enter the market and erode the market share of any established firm charging above average price. Thus, in the long run equilibrium, price will be equal to ATC.

In the Long Run, in a Monopolistically Competitive Market, Price