The less elastic a monopolistic competitor's long-run demand curve, the

A) greater its excess capacity.
B) lower its price relative to that of a pure competitor having the same cost curves.
C) higher its long-run economic profit.
D) lower its average total cost at its equilibrium level of output.

Elastic

A characteristic of supply or demand that indicates a high responsiveness to changes in price.

Monopolistic Competitor

A firm operating in a market structure where many companies sell products that are similar but not identical, allowing for some degree of market power and price setting.

Excess Capacity

A situation in which a company can produce more goods or services than currently demanded, due to underused resources.