In the long run, economic theory predicts that a monopolistically competitive firm will

Name: In the long run, economic theory predicts that a monopolistically competitive firm will
Brand: Quizplus
Rating: 4.9 (58 reviews)

Question

Quizplus · Accepted Answer

In the long run, a monopolistically competitive firm will have excess production capacity because it will produce at a level of output where its average total cost is not minimized, which is a characteristic of monopolistic competition due to the downward-sloping demand curve each firm faces.

In the Long Run, Economic Theory Predicts That a Monopolistically