Economics (AS & A Level) · May / June 2022 · Paper 31 · Question 9
9708Different market structures
The diagram shows the short-run equilibrium for a firm operating in a monopolistically competitive market. What is not likely to occur at the long-run equilibrium?
- AThe individual firm's demand curve is more elastic.
- BThe individual firm's demand curve has moved left.
- CThe profit-maximising price is greater than average cost.
- DThe profit-maximising price is greater than marginal cost.
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Correct answer: C. The profit-maximising price is greater than average cost.
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