Consider a Monopolistically Competitive Industry in Long-Run Equilibrium

Multiple Choice

Consider a monopolistically competitive industry in long-run equilibrium.Will this industry be productively efficient?

A) Yes.Since the firms are in long-run equilibrium,they will all be producing at the minimum of their LRAC curves.
B) Yes.Since the firms are in long-run equilibrium,they will all be operating on their LRAC curves.
C) Yes.In long-run equilibrium,each firm is producing at an output level where price is equal to marginal cost.
D) No.Firms are selling their output at a level where price exceeds marginal cost and thus,by definition,cannot be productively efficient.
E) No.Since firms are selling differentiated products and there is no industry-wide price,we cannot conclude that marginal cost will be equated across all firms.