Monopolistically competitive firms in long-run equilibrium produce at ________ the optimal scale.

A) more than
B) exactly
C) less than
D) sometimes more and sometimes less than

Question

Monopolistically competitive firms in long-run equilibrium produce at ________ the optimal scale.A)  more thanB)  exactlyC)  less thanD)  sometimes more and sometimes less than

Alyssa Keaveney · Accepted Answer

Final Answer : C, Explanation :  Monopolistically competitive firms in long-run equilibrium produce at less than the optimal scale because they face downward-sloping demand curves and have excess capacity. This means they do not produce where average total cost is minimized.

Monopolistically competitive firms in long-run equilibrium produce at ________ the optimal scale.

A) more than
B) exactly
C) less than
D) sometimes more and sometimes less than

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