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Figure: Monopolistic Competition II
-(Figure: Monopolistic Competition II) Which panel(s) in the figure Monopolistic Competition II show(s) a monopolistic competitor in long-run equilibrium?
A) panel (a)
B) panel (b)
C) panel (c)
D) panels (a), (b), and (c)

Question

Use the following to answer questions:
Figure: Monopolistic Competition II 
-(Figure: Monopolistic Competition II) Which panel(s) in the figure Monopolistic Competition II show(s) a monopolistic competitor in long-run equilibrium?
A) panel (a) 
B) panel (b) 
C) panel (c) 
D) panels (a), (b), and (c)

Quizplus · Accepted Answer

In long-run equilibrium for a monopolistic competitor, the firm will produce where its demand curve is tangent to its average total cost curve, indicating zero economic profit. This is shown in panel (c).

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