Long-Run Equilibrium in a Monopolistically Competitive Industry Requires the Representative

Multiple Choice

Long-run equilibrium in a monopolistically competitive industry requires the representative firm to earn zero economic profits,because ________.

A) the government regulates the price
B) the lack of barriers to entry means entry will drive the profit-maximizing level of output to a point where Price = Average total cost
C) the lack of barriers to entry means entry will drive the profit-maximizing level of output to a point where Price = Marginal cost
D) Marginal revenue > Average total cost at the profit-maximizing level of output