In the long run,
A)monopolistically competitive firms earn a higher profit than perfectly competitive firms because monopolistically competitive firms have some monopoly power.
B)monopolistically competitive firms produce a higher output than perfectly competitive firms because competition drives the perfectly competitive firms' output down.
C)both monopolistically competitive and perfectly competitive firms produce where P = MC.
D)both monopolistically competitive and perfectly competitive firms produce where P = ATC.

Question

Quizplus · Accepted Answer

In the long run, both monopolistically competitive and perfectly competitive firms earn zero economic profit, meaning they produce where price equals average total cost (P = ATC).

In the Long Run