Answer-In monopolistic competition, firms in the long run :

Explanation In the long run, free entry erodes supernormal profits, and firms do not produce at the minimum ATC due to product differentiationleading to excess capacity .

Question

In monopolistic competition, firms in the long run :

A Earn supernormal profits

B Produce at the minimum point of their average total cost curve

C Face perfectly elastic demand

D Earn normal profits and have excess capacity

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In monopolistic competition, firms in the long run :

Solution