Which of the following is generally true of a monopolistic competitor operating in the long run?
A) price greater than minimum average total cost
B) price equal to marginal revenue
C) price equal to marginal cost
D) positive economic profits

Question

Quizplus · Accepted Answer

In the long run, a monopolistic competitor will produce where MR=MC, but due to the differentiated product, it will still have a price greater than the minimum average total cost. This may result in positive economic profits. However, if economic profits are being made, new firms will enter the market and decrease demand for the existing firm's product, eventually leading to zero economic profits in the long run.

Which of the Following Is Generally True of a Monopolistic