Which two curves are tangent to each other in a monopolistically competitive market with zero economic profit?
A)demand and average variable cost
B)demand and average total cost
C)marginal revenue and average variable cost
D)marginal revenue and average total cost

Question

Quizplus · Accepted Answer

In a monopolistically competitive market with zero economic profit, the demand curve is tangent to the average total cost curve. This indicates that the firm is covering all its costs, including opportunity costs, but is not making any economic profit.

Which Two Curves Are Tangent to Each Other in a Monopolistically