Refer to Figure 26

question 29

Multiple Choice

Refer to Figure 26.3 for a monopolistically competitive firm in the long run.Which of the following observations results in the problem of excess capacity?

• A)The firm is producing less than the minimum-ATC output rate.
• B)The firm is producing at Q₃ instead of where MR = MC.
• C)The firm is earning only zero economic profits in the long run.
• D)The firm is producing at Q₁ instead of where MC = demand.

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