In long-run equilibrium, monopolistic competitors produce at the minimum point on the average total cost curve.True

Question

Quizplus · Accepted Answer

In the long-run equilibrium, monopolistic competitors produce where marginal cost equals marginal revenue, which is not necessarily at the minimum point of the average total cost curve. It may be at a higher point on the curve because the firm has some market power and is charging a price above the marginal cost.

In Long-Run Equilibrium, Monopolistic Competitors Produce at the Minimum Point