Which of the following conditions is characteristic of a monopolistically competitive firm in both the short run and the long run? A)P MC B)MC = ATC C)P

Question

Which of the following conditions is characteristic of a monopolistically competitive firm in both the short run and the long run?
A)P > MC
B)MC = ATC
C)P < MR
D)P = ATC

Quizplus · Accepted Answer

In a monopolistically competitive market, firms have some degree of market power which allows them to charge a price (P) that is greater than marginal cost (MC). This is characteristic of both the short run and the long run, as these firms face downward sloping demand curves and can set their prices above marginal cost.

Which of the Following Conditions Is Characteristic of a Monopolistically