When a profit-maximizing firm in a monopolistically competitive market is producing the long-run equilibrium quantity,what is the result

Question

Quizplus · Accepted Answer

In the long-run equilibrium of a monopolistically competitive market, firms will produce at a quantity where their demand curve is tangent to their average-total-cost curve. This means that they are producing at a level where they are earning zero economic profits (normal profit). Therefore, choices A and C are incorrect. Additionally, while marginal revenue will determine the profit-maximizing quantity for the firm, it will not necessarily be tangent to the marginal cost curve as stated in choice B.

When a Profit-Maximizing Firm in a Monopolistically Competitive Market Is