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Zielflug [23.3K]
3 years ago
6

In the long run the prices charged by a firm in monopolistic competition will be

Business
1 answer:
kumpel [21]3 years ago
6 0

Answer: The correct answer is "d. equal to average cost, including the opportunity cost of capital.".

Explanation: In the long run the prices charged by a firm in monopolistic competition will be equal to average cost, including the opportunity cost of capital.

In long-term monopolistic competition, the demand curve will be tangent to the average long-term cost and the price set at this level. The benefits will be equal to zero and therefore there will be no entry or exit of companies.

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