In long-run equilibrium in a monopolistically competitive industry:

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In the long-run equilibrium of a monopolistically competitive industry, firms will produce at a point where P > minimum AC. This is because firms in this market structure have some degree of market power, allowing them to charge a markup above their marginal cost. However, they still face some competition from other firms producing similar products, which prevents them from charging a price that is too high. As a result, they will produce a quantity where their average cost is minimized but still charge a price that is higher than their minimum average cost.

In Long-Run Equilibrium in a Monopolistically Competitive Industry