In the long run, the price of information products in monopolistically competitive markets will be equal to

Question

Quizplus · Accepted Answer

In the long run, firms in monopolistically competitive markets will set their prices where marginal revenue (MR) equals marginal cost (MC). Since information products have very low marginal costs, the price will be close to the average total cost (ATC) of production. Therefore, the best choice is D, which represents ATC.

In the Long Run, the Price of Information Products in Monopolistically