In the long run, monopolistically competitive firms:
A) produce at the level that minimizes average total cost.
B) set marginal revenue equal to price.
C) cannot earn an economic profit.
D) produce so that marginal cost equals price.

Question

Quizplus · Accepted Answer

In the long run, monopolistically competitive firms cannot earn an economic profit due to the entry of new firms, which drives down prices and profits to a normal level.

In the Long Run, Monopolistically Competitive Firms