Which of the following holds good in the long run under monopolistic competition?
A)Price = marginal cost
B)Price = average cost
C)Price average cost marginal cost
D)Price average cost = marginal cost
E)Marginal revenue = price

Question

Which of the following holds good in the long run under monopolistic competition?
A)Price = marginal cost
B)Price = average cost
C)Price > average cost > marginal cost
D)Price > average cost = marginal cost
E)Marginal revenue = price

Quizplus · Accepted Answer

In the long run, firms in monopolistic competition earn zero economic profit, so price equals average cost.

Which of the Following Holds Good in the Long Run