Question

A monopolistically competitive firm is in long-run equilibrium. Which of the following combinations of conditions holds simultaneously?

A P = MC and P = AC, with the firm producing at the minimum point of its LAC curve
B P > MC and P = AC, with the firm producing to the left of the minimum point of its LAC curve, resulting in excess capacity
C P = MC and P > AC, with positive long-run economic profits attracting new entrants
D P > MC and P > AC, with firms earning supernormal profits in the long run due to product differentiation
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