In the long run, monopolistically competitive firms have:

Name: In the long run, monopolistically competitive firms have:
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Question

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Monopolistically competitive firms have excess capacity in the long run because they have some market power that allows them to charge prices above their marginal costs, but they do not have enough market power to eliminate all competition and earn monopoly profits. As a result, they do not produce at the minimum point of their average cost curve, leading to excess capacity.

In the Long Run, Monopolistically Competitive Firms Have