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Megan Coleman
on Nov 26, 2024

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In the long run, a monopolistically competitive firm

A) earns an economic profit.
B) produces where P = ATC.
C) produces where MR exceeds MC.
D) achieves allocative efficiency.

Monopolistically Competitive

A business configuration in which various enterprises provide goods that are comparable, though not identical, affording them a measure of market dominance and the capacity to differentiate their products.

Economic Profit

The profit a company makes after deducting both its explicit (direct) and implicit (opportunity) costs; it's a more comprehensive measure than accounting profit.

Allocative Efficiency

The optimal distribution of resources in a market where goods and services are dispensed according to consumer preferences.

  • Distinguish between the equilibriums of the short-run and the long-run within monopolistically competitive markets.
  • Describe the manner in which markets characterized by monopolistic competition attain or do not attain efficiency in allocation and production.
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Dulce Maria YadaoNov 27, 2024
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