In long-run equilibrium, both purely competitive and monopolistically competitive firms will
A) produce at minimum average total cost.
B) earn economic profits.
C) achieve allocative efficiency.
D) equate marginal cost and marginal revenue.

Question

Quizplus · Accepted Answer

In long-run equilibrium, both purely competitive and monopolistically competitive firms equate marginal cost and marginal revenue to maximize profit, although they may not achieve allocative efficiency or produce at minimum average total cost.

In Long-Run Equilibrium, Both Purely Competitive and Monopolistically Competitive Firms