When a monopolistically competitive firm is in long-run equilibrium,
A)marginal revenue is equal to marginal cost.
B)average total cost is minimized.
C)marginal revenue is tangent to average total cost.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

In long-run equilibrium, a monopolistically competitive firm sets output where marginal revenue equals marginal cost, ensuring no economic profit. However, average total cost is not minimized, and marginal revenue is not tangent to average total cost.

When a Monopolistically Competitive Firm Is in Long-Run Equilibrium