You are hired as a consultant to a monopolistically competitive firm. the firm reports the following information about its price, marginal cost, and average total cost: p=mc, p> atc which of the following statements are true about the firm? a. the firm can increase its profit by reducing its output. b. the firm is in long-run equilibrium. c. the firm is possibly maximizing profit.

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.