In the Long-Run Equilibrium, a Difference Between Monopolistically Competitive Firms

question 159

Multiple Choice

In the long-run equilibrium, a difference between monopolistically competitive firms and perfectly competitive firms is:

• A)monopolistically competitive firms produce on the downward sloping section of their ATC curves, while perfectly competitive firms produce at the minimum of ATC
• B)monopolistically competitive firms set P=MC, while competitive firms set P=MR
• C)individual firm demand slopes down for monopolistically competitive firms, while market demand is horizontal for perfectly competitive markets
• D)average total cost is U-shaped for monopolistically competitive firms, while it is downward sloping for perfectly competitive firms