The Diagram Below Shows Demand and Cost Curves for a Monopolistically

Multiple Choice

The diagram below shows demand and cost curves for a monopolistically competitive firm. FIGURE 11-3
-Refer to Figure 11-3.A monopolistically competitive firm is allocatively inefficient because in the long-run equilibrium

A) LRAC is not at its minimum.
B) MC is greater than price.
C) price is greater than MC at Q₁.
D) price is greater than LRAC at Q₁.
E) None of the above - the long-run equilibrium is allocatively efficient.