Exhibit 10-2 a Monopolistic Competitive Firm

Multiple Choice

Exhibit 10-2 A monopolistic competitive firm

Comparing the firms in a monopolistic competitive industry shown in Exhibit 10-2 to a perfectly competitive firm in long-run equilibrium, we find that both firms

A) choose a price equal to the marginal cost at the profit-maximizing quantity.
B) will experience entry of new firms into the industry.
C) earn zero economic profits.
D) minimize cost per unit at their profit-maximizing quantity.