An important difference between the situation faced by a profit-maximizing monopolistically competitive firm in the short run and the situation faced by that same firm in the long run is that in the short run, a.there are many firms in the market, but in the long run, there are only a few firms in the market. b.price may exceed marginal cost, but in the long run, price equals marginal cost. c.price may exceed marginal revenue, but in the long run, price equals marginal revenue. d.price may exceed average total cost, but in the long run, price equals average total cost.

Firms in the monopolistic market structure there exists a large number of firms competing with each…

Answered: An important difference between the…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Monopolistic Competition

Section: Chapter Questions

Problem 3PA

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An important difference between the situation faced by a profit-maximizing monopolistically competitive firm in the short run and the situation faced by that same firm in the long run is that in the short run,

	a.	there are many firms in the market, but in the long run, there are only a few firms in the market.
	b.	price may exceed marginal cost, but in the long run, price equals marginal cost.
	c.	price may exceed marginal revenue, but in the long run, price equals marginal revenue.
	d.	price may exceed average total cost, but in the long run, price equals average total cost.

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