Asked by Carolina Ochoa on May 14, 2024
Verified
When a monopolistically competitive firm is in long-run equilibrium,
A) P = MC = ATC.
B) MR = MC and minimum ATC > P.
C) MR > MC and P = minimum ATC.
D) MR = MC and P> minimum ATC.
Long-Run Equilibrium
A state in which all inputs and outputs in a market are fully adjusted and there is no tendency for change, often associated with perfect competition markets.
Marginal Revenue
The extra revenue obtained by selling an additional unit of a product or service.
Marginal Cost
The cost increase from producing a further unit of a product or service.
- Understand the aspects and equilibrium standards for businesses functioning in the realm of monopolistic competition.
- Compare and contrast monopolistic competition with pure competition and monopoly in terms of profitability and efficiency.
Verified Answer
Learning Objectives
- Understand the aspects and equilibrium standards for businesses functioning in the realm of monopolistic competition.
- Compare and contrast monopolistic competition with pure competition and monopoly in terms of profitability and efficiency.
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