In the long run, a monopolistically competitive firm produces at efficient scale.

Name: In the long run, a monopolistically competitive firm produces at efficient scale.
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Question

​In the long run, a monopolistically competitive firm produces at efficient scale.

Quizplus · Accepted Answer

In a monopolistically competitive market, firms do not produce at the efficient scale; instead, they operate with excess capacity because they face downward-sloping demand curves and produce at a quantity where marginal cost is less than average total cost.

​In the Long Run, a Monopolistically Competitive Firm Produces at Efficient

In the Long Run, a Monopolistically Competitive Firm Produces at Efficient