GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is true at equilibrium in monopolistic competition?
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Average revenue is greater than marginal revenue
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Price is greater than marginal cost
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Both (a) and (b)
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Average revenue is equal to marginal revenue
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Explanation:
Detailed explanation-1: -A Price is greater than marginal revenue.
Detailed explanation-2: -The correct option is c. It can earn an economic profit in the short run, but not the long run.
Detailed explanation-3: -Answer and Explanation: The correct answer is c. Profits are always zero. The major difference between monopolistically competitive firms and perfectly competitive firms is that monopolistically competitive firms produce differentiated product.
There is 1 question to complete.