Which of the following is NOT a characteristic of long-run equilibrium in monopolistic competition?
A) The firm makes zero economic profit.
B) Price is equal to average total cost.
C) Production occurs at minimum average total cost.
D) Marginal revenue is equal to marginal cost.
E) Price exceeds marginal revenue.

Question

Quizplus · Accepted Answer

In long-run equilibrium under monopolistic competition, firms do not necessarily produce at the minimum average total cost due to the presence of product differentiation and brand loyalty, which allows them to have some degree of market power and not be as efficient as in perfect competition.

Which of the Following Is NOT a Characteristic of Long-Run