The Diagram Below Shows Demand and Cost Curves for a Monopolistically

question 103

Multiple Choice

The diagram below shows demand and cost curves for a monopolistically competitive firm.
FIGURE 11- 3
-Refer to Figure 11- 3.A monopolistically competitive firm is allocatively inefficient because in the long- run equilibrium

• A)MC is greater than price.
• B)LRAC is not at its minimum.
• C)price is greater than LRAC at Q1.
• D)price is greater than MC at Q1.
• E)None of the above - the long- run equilibrium is allocatively efficient.

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