Figure 12.1.2
-Which of the following is true for both perfectly competitive and monopolistically competitive firms in the long run?
A) P = MC.
B) MC = ATC.
C) P MR.
D) Profit equals zero.

Question

Figure 12.1.2
-Which of the following is true for both perfectly competitive and monopolistically competitive firms in the long run?
A) P = MC. 
B) MC = ATC. 
C) P > MR. 
D) Profit equals zero.

Quizplus · Accepted Answer

In the long run, both perfectly competitive and monopolistically competitive firms earn zero economic profit due to the entry and exit of firms in the market.

Figure 12.1.2 -Which of the Following Is True for Both Perfectly Competitive