In long-run equilibrium, both purely competitive and monopolistically competitive firms will

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In long-run equilibrium, both purely competitive and monopolistically competitive firms adjust their output so that marginal cost (MC) equals marginal revenue (MR), ensuring profit maximization or loss minimization. However, only purely competitive firms produce at minimum average total cost and achieve allocative efficiency in the long run, while monopolistically competitive firms do not due to product differentiation and excess capacity. Neither purely competitive nor monopolistically competitive firms earn economic profits in the long run due to free entry and exit in the market, which drives economic profits to zero.

In Long-Run Equilibrium, Both Purely Competitive and Monopolistically Competitive Firms