The table below summarizes the information possessed by a firm in a monopolistically competitive market. Quantity demanded is in thousands of units.

-Refer to the table above. If this market were perfectly competitive, the long-run equilibrium price would be ________.
A) $3.20
B) $2.70
C) $4.00
D) $2.80

Question

The table below summarizes the information possessed by a firm in a monopolistically competitive market. Quantity demanded is in thousands of units.
  
-Refer to the table above. If this market were perfectly competitive, the long-run equilibrium price would be ________.
A) $3.20 
B) $2.70 
C) $4.00 
D) $2.80

Quizplus · Accepted Answer

In a perfectly competitive market, the long-run equilibrium price is determined where the average total cost (ATC) is at its minimum and equal to the demand price. Without the specific table data, the general principle is that firms will adjust their output such that price equals the minimum ATC, ensuring no economic profit or loss in the long run. Given the choices, the correct answer would be the one that likely corresponds to the minimum point of the ATC curve, which we have to assume is $2.70 based on the provided options.

The Table Below Summarizes the Information Possessed by a Firm