When a monopolistically competitive firm is in long-run equilibrium,
A) production takes place where ATC is minimized.
B) marginal revenue equals marginal cost and price equals average total cost.
C) normal profit is zero and price equals marginal cost.
D) economic profit is zero and price equals marginal cost.

Question

Quizplus · Accepted Answer

In long-run equilibrium, a monopolistically competitive firm produces where marginal revenue equals marginal cost, and price equals average total cost, resulting in zero economic profit.

When a Monopolistically Competitive Firm Is in Long-Run Equilibrium