[amp_mcq option1=”at the minimum point of the long-run average cost curve” option2=”in the declining segment of the long-run average cost curve” option3=”in the rising segment of the long-run average cost curve” option4=”when the price is equal to marginal cost” correct=”option4″]<\/p>\n
The correct answer is: D. when the price is equal to marginal cost.<\/p>\n
In monopolistic competition, a firm is in long run equilibrium when it is producing at the point where the marginal cost curve intersects the average revenue curve. This is because at this point, the firm is producing the quantity of output where the additional revenue from selling one more unit of output is equal to the additional cost of producing one more unit of output. In other words, the firm is maximizing its profits.<\/p>\n
The other options are incorrect because they do not represent the point of long run equilibrium for a monopolistically competitive firm. Option A is incorrect because the minimum point of the long-run average cost curve is the point of minimum efficient scale, where the firm is producing at the lowest possible average cost. However, a monopolistically competitive firm will not necessarily produce at this point in the long run, because it will be able to earn profits by producing at a lower level of output. Option B is incorrect because the declining segment of the long-run average cost curve is the segment of the curve where average cost is falling. However, a monopolistically competitive firm will not necessarily produce in this segment of the curve in the long run, because it will be able to earn profits by producing at a higher level of output. Option C is incorrect because the rising segment of the long-run average cost curve is the segment of the curve where average cost is rising. However, a monopolistically competitive firm will not necessarily produce in this segment of the curve in the long run, because it will be able to earn profits by producing at a lower level of output.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”at the minimum point of the long-run average cost curve” option2=”in the declining segment of the long-run average cost curve” option3=”in the rising segment of the long-run average cost curve” option4=”when the price is equal to marginal cost” correct=”option4″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-48920","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n