Question
In: Economics
Which of the following is not a characteristic of long run equilibrium in a monopolistically competitive...
Which of the following is not a characteristic of long run equilibrium in a monopolistically competitive market?
A.
Marginal revenue equals marginal cost.
B.
Selling price is greater than marginal cost.
C.
Production is at minimum average total cost.
D.
Selling price equals average total cost.
Solutions
Expert Solution
Answer : The answer is option C.
In long run for monopolistically competitive firm at equilibrium quantity level the price is equal to ATC (Average Total Cost). But at equilibrium quantity level the ATC is not minimum. Therefore, option C is correct.
Rahul Sunny answered 2 years agoRelated Solutions
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