Which of the following statements regarding monopolistic competition is not correct?
A)In the long-run equilibrium, price equals average total cost.
B)In the long-run equilibrium, firms earn zero economic profit.
C)In the long-run equilibrium, firms charge a price above marginal cost.
D)In the long-run equilibrium, firms produce a quantity in excess of their efficient scale.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms produce at a quantity less than their efficient scale in the long run due to excess capacity.

Which of the Following Statements Regarding Monopolistic Competition Is Not