In the short run,a monopolistically competitive firm produces at the optimal level of output and is earning positive economic profits.Which expression must be TRUE for this firm?

A) MR = MC and P = ATC.
B) MR = MC and P > ATC.
C) MR > MC and P = ATC.
D) P = MR = MC > ATC.

Economic Profits

Profit that exceeds both the total explicit and implicit costs, often signaling above-normal returns in competitive markets.

Optimal Level

The most efficient, effective, or desirable point or degree for a specific outcome or condition.

Monopolistically Competitive

Pertains to a market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and product differentiation.