The Theory of Monopolistic Competition Predicts That in Long-Run Equilibrium

question 7

Multiple Choice

The theory of monopolistic competition predicts that in long-run equilibrium a monopolistically competitive firm will:

• A) produce the output level at which price equals long-run marginal cost.
• B) operate at minimum long-run average cost.
• C) overutilize its insufficient capacity.
• D) produce the output level at which price equals long-run average cost.

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