Toby operates a small deli downtown in a monopolistically competitive restaurant industry.In long-run equilibrium, the profit- maximizing price of the three-meat sandwich is $3.Price also equals his average total cost.Toby's minimum average total cost is less than $3.False

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, firms in long-run equilibrium set prices equal to average total cost, which includes both minimum average total cost and any excess capacity costs. Therefore, the minimum average total cost must be less than the price of $3.

Toby Operates a Small Deli Downtown in a Monopolistically Competitive