question archive In the long run, the price charged by the monopolistically competitive firm attempting to maximize profits _____ a
In the long run, the price charged by the monopolistically competitive firm attempting to maximize profits _____ a
Subject:MarketingPrice:2.88 Bought3
In the long run, the price charged by the monopolistically competitive firm attempting to maximize profits _____
a. must be less than ATC.
b. must be more than ATC.
c. may be either equal to ATC, less than ATC, or more than ATC.
d. will be equal to ATC.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Answer: B
If price is ever less than or equal than ATC in the long-run, then long-run profits are negative or zero and thus a firm just wouldn't be in business anymore. They would rather just shut down operations and leave the market. If ATC though is more than ATC, then profits are positive and is the only case where the firm would continue to operate.
