The long run outcome of the monopolistically competitive firm:

Question

Quizplus · Accepted Answer

Monopolistically competitive firms do not achieve efficiency because they produce where marginal revenue is less than marginal cost. They also do not maximize total surplus since they charge a markup over marginal cost, leading to a deadweight loss. Finally, they do not minimize average total cost as they produce at a smaller scale than the efficient scale. Therefore, none of the statements are true.

The Long Run Outcome of the Monopolistically Competitive Firm