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. Can the firm possibly be maximizing profit? If not, what should it do to increase profit? If the firm is maximizing profit, is the market in a long-run equilibrium? If not, what will happen to restore long-run equilibrium?
a. $P < MC, P > ATC$
b. $P > MC, P < ATC$
c. $P = MC, P > ATC$
d. $P > MC, P = ATC$