In the long run, a monopolistically competitive firm will produce where:
A) average cost equals price.
B) average cost equals marginal revenue.
C) marginal revenue equals price.
D) marginal cost equals price.

Question

Quizplus · Accepted Answer

In the long run, a monopolistically competitive firm will produce at a point where average cost equals price due to the entry and exit of firms in the market, which drives economic profits to zero.

In the Long Run, a Monopolistically Competitive Firm Will Produce