Asked by sheshu vmware on May 30, 2024
Verified
In the long run,if a monopolistically competitive firm produces the optimal level of output:
A) P = ATC = MR = MC.
B) P > ATC > MR = MC.
C) P = ATC > MR > MC.
D) P = ATC > MR = MC.
Long Run
A period of time in which all factors of production and costs are variable, allowing companies to adjust to market changes.
Monopolistically Competitive
Refers to a market structure where many firms sell products that are similar but not identical, allowing for some degree of market power.
Optimal Level
The optimal level signifies the most efficient, effective, or favorable point or degree for a specific goal or condition.
- Familiarize oneself with the equilibrium dynamics in monopolistic competition over short and long durations, particularly the no-profit condition.
Verified Answer
Learning Objectives
- Familiarize oneself with the equilibrium dynamics in monopolistic competition over short and long durations, particularly the no-profit condition.
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