Economics · Monopolistic Competition
In a monopolistically competitive market in long-run equilibrium, which of the following conditions simultaneously hold? I. P = AC (zero economic profit) II. P > MC (allocative inefficiency) III. Firms operate at minimum efficient scale IV. MR = MC (profit maximisation) Select the correct combination:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1I, III and IV only
- 2I, II and IV only✓
- 3II and III only
- 4I and IV only
Correct answer
I, II and IV only
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