Examining the Cost,revenue,and Demand Curves for a Monopolistic Competitor Reveals

Multiple Choice

Examining the cost,revenue,and demand curves for a monopolistic competitor reveals that,at optimal output,the demand curve lies above the average total cost curve.Which of the following is true?

A) There is economic profit in the long run.
B) There is an economic loss in the long run.
C) Firms will enter the industry in the long run.
D) Firms will exit the industry in the long run.
E) There is not enough information because demand is an imperfect benchmark for measuring profitability.