In the long run,monopolistically competitive firms produce a level of output such that:

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In the long run, monopolistically competitive firms produce at a level where price (P) is greater than marginal cost (MC), indicating some degree of market power and the ability to set prices above production costs. They also produce where price equals average total cost (ATC), ensuring they are not making economic profits or losses in the long run. Additionally, because they do not produce at the minimum of the average cost curve due to product differentiation and market power, their ATC is higher than the minimum average costs. This combination of conditions reflects the unique characteristics of monopolistic competition, where firms have some control over pricing but face competition that drives economic profits to zero in the long run.

In the Long Run,monopolistically Competitive Firms Produce a Level of Output