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The Diagram Below Shows Demand and Cost Curves for a Monopolistically

Question 66

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The diagram below shows demand and cost curves for a monopolistically competitive firm. The diagram below shows demand and cost curves for a monopolistically competitive firm. FIGURE 11-3 -Refer to Figure 11-3.A monopolistically competitive firm is allocatively inefficient because in the long-run equilibrium A) LRAC is not at its minimum. B) MC is greater than price. C) price is greater than MC at Q<sub>1</sub>. D) price is greater than LRAC at Q<sub>1</sub>. E) None of the above - the long-run equilibrium is allocatively efficient. FIGURE 11-3
-Refer to Figure 11-3.A monopolistically competitive firm is allocatively inefficient because in the long-run equilibrium


A) LRAC is not at its minimum.
B) MC is greater than price.
C) price is greater than MC at Q1.
D) price is greater than LRAC at Q1.
E) None of the above - the long-run equilibrium is allocatively efficient.

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