Use the following for questions 22-31.
Exhibit: Profit Maximization in Monopolistic Competition

-(Exhibit: Profit Maximization in Monopolistic Competition) In monopolistic competition, long-run equilibrium is characterized by:

Question

Use the following for questions 22-31.
Exhibit: Profit Maximization in Monopolistic Competition
 
-(Exhibit: Profit Maximization in Monopolistic Competition) In monopolistic competition, long-run equilibrium is characterized by:
A) P > MR. 
B) P < MR. 
C) P = MR. 
D) profit maximization, which occurs where P = MR = MC.

Quizplus · Accepted Answer

In monopolistic competition, firms have some degree of market power, allowing them to set prices above marginal revenue (P > MR). This is unlike perfect competition, where P = MR due to the firms being price takers.

Use the Following for Questions 22-31