In the long run, a profit-maximizing, monopolistically competitive firm operates:

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In the long run, a monopolistically competitive firm operates with excess capacity because it produces at a level of output where average total cost is not at its minimum. This is due to the downward-sloping demand curve it faces, which prevents it from producing at the minimum of the average total cost curve while also equating marginal revenue and marginal cost.

In the Long Run, a Profit-Maximizing, Monopolistically Competitive Firm Operates