In the short run,a firm operating in a monopolistically competitive market

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In the short run, a firm operating in a monopolistically competitive market can earn zero economic profits. This is because, in such a market structure, firms have some market power to differentiate their products from those of their competitors, but they also face competition from other similar firms. As a result, they cannot charge prices that are higher than their costs in the long run. However, in the short run, they may be able to charge slightly higher prices than their costs, but this is limited by the entry of new firms into the market, which increases competition and drives down profits. Therefore, the best choice is C. Choices A and D are incorrect because a monopolistically competitive firm does not produce where marginal revenue equals average total cost, nor does it set price equal to marginal cost. Choice B is also incorrect because a monopolistically competitive firm does not necessarily maximize both revenues and profits simultaneously.

In the Short Run,a Firm Operating in a Monopolistically Competitive