- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 1. The Firm and Market Structures
- Subject 7. Monopolistic Competition
CFA Practice Question
In the long run, the price a monopolistic competitor sets is equal to ______.
A. marginal revenue
B. average total cost
C. marginal cost
Explanation: After long-run adjustments have been made, price and quantity fall with firm entry until P = ATC and firms earn zero economic profit.
User Contributed Comments 1
| User | Comment |
|---|---|
| danlan | For a firm, Average Revenue = Sales/number of goods sold=selling price. |