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

Question

Quizplus · Accepted Answer

In the long run, a monopolistic competitor will produce at a level where marginal revenue equals marginal cost, which will be less than the quantity produced in the short run. Since a monopolistic competitor has market power, it can charge a price that is greater than its marginal cost. Therefore, in the long run, a monopolistic competitor will charge a price that exceeds its marginal cost.

Which of the Following Is Generally True of a Monopolistic