Asked by Nikos Xydakis on Jul 02, 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.
MR
Stands for Marginal Revenue, which is the additional revenue gained from selling one more unit of a product or service.
MC
Short for Marginal Cost, it refers to the increase in total cost that arises from producing one additional unit of a good or service.
Minimum ATC
The point at which the average total cost of production is at its lowest, indicating the most efficient scale of production.
- Acquire knowledge on the subject of long-run equilibrium in markets with monopolistic competition.
Verified Answer
Learning Objectives
- Acquire knowledge on the subject of long-run equilibrium in markets with monopolistic competition.
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