(Solved): Suppose that a firm produces wooden train engines in a monopolistically competitive market. The fo ...

Suppose that a firm produces wooden train engines in a monopolistically competitive market. The following graph shows its demand curve, marginal-revenue (MR) curve, marginal-cost (MC) curve, and average-total-cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that at the optimal quantity for each firm. Furthermore, a monopolistically competitive firm's average total cost in long-run equilibrium is the minimum average total cost. True or False: This indicates that there is no excess capacity in the market for engines. True \( P>A T C \) \( P=A T C \) \( M R>M C \) \( M R=M C \) False