The long-run equilibrium in a monopolistically competitive market is similar to the long-run equilibrium in a perfectly competitive market in that in both markets, firms
A)produce at the minimum point of their average total cost curves.
B)produce where price equals marginal cost.
C)break even.
D)produce where price equals marginal revenue.

Question

Quizplus · Accepted Answer

In both monopolistic competition and perfect competition, firms break even in the long run, meaning they earn zero economic profit. This occurs because of the free entry and exit of firms in the market, which drives profits to zero.

The Long-Run Equilibrium in a Monopolistically Competitive Market Is Similar