[amp_mcq option1=”At the minimum point of the LAC curve” option2=”In the declining segment of the LAC curve” option3=”In the rising segment of the LAC curve” option4=”When price is equal to marginal cost” correct=”option4″]<\/p>\n
The correct answer is: D. When 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 its marginal revenue equals its marginal cost. This is because, in the long run, firms in monopolistic competition will enter or exit the market until they are making zero economic profit. When a firm is making zero economic profit, its marginal revenue is equal to its marginal cost.<\/p>\n
Option A is incorrect because the minimum point of the LAC curve is the point of lowest average cost. In the long run, firms in monopolistic competition will produce at the point where their average cost is minimized. However, this point may not be the point where their marginal revenue equals their marginal cost.<\/p>\n
Option B is incorrect because the declining segment of the LAC curve is the segment of the curve where average cost is decreasing. In the long run, firms in monopolistic competition will produce at the point where their average cost is minimized. However, this point may not be the point where their marginal revenue equals their marginal cost.<\/p>\n
Option C is incorrect because the rising segment of the LAC curve is the segment of the curve where average cost is increasing. In the long run, firms in monopolistic competition will produce at the point where their average cost is minimized. However, this point may not be the point where their marginal revenue equals their marginal cost.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”At the minimum point of the LAC curve” option2=”In the declining segment of the LAC curve” option3=”In the rising segment of the LAC curve” option4=”When 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-50513","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n