In long run equilibrium, the monopolistic competitor will most likely
A)be earning zero economic profit.
B)be operating at the lowest point on its average total cost curve.
C)charge a price that is equal to marginal revenue.
D)charge a price that is equal to marginal cost.

Question

Quizplus · Accepted Answer

In the long run, monopolistic competition will lead to zero economic profit as new entrants will enter the market and compete away any above normal profits. Therefore, option A is the most likely outcome.

In Long Run Equilibrium, the Monopolistic Competitor Will Most Likely