In Monopolistic Competition, the Long-Run Equilibrium Price _____ Marginal Cost

question 98

Multiple Choice

In monopolistic competition, the long-run equilibrium price _____ marginal cost because _____.

• A) equals; firms earn zero economic profit
• B) exceeds; firms face downward-sloping demand curves
• C) exceeds; there are significant barriers to entry
• D) less than; firms set their production plans simultaneously

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