In the long run,the price charged by a monopolistic competitor will:
A) equal marginal cost.
B) equal average total cost.
C) equal marginal revenue.
D) be characterized by both b. and c.

Question

Quizplus · Accepted Answer

In the long run, a monopolistic competitor will set a price equal to average total cost due to the entry and exit of firms, leading to zero economic profit.

In the Long Run,the Price Charged by a Monopolistic Competitor