In the long run,a profit-maximizing monopolistically competitive firm sets it price:

A) above marginal cost.
B) below marginal cost.
C) equal to marginal revenue.
D) equal to marginal cost.

A profit-maximizing monopolistically competitive firm sets its price above marginal cost. This is because in monopolistically competitive markets, firms have some market power to raise prices above marginal cost, but they still face competition that constrains their ability to do so. By setting a price above marginal cost, the firm can earn a positive profit in the short run, but it must also consider the possibility of new entrants or existing competitors undercutting its price in the long run. Setting a price below marginal cost would result in losses for the firm, while setting a price equal to marginal revenue would not maximize its profit, as marginal revenue is less than price in monopolistically competitive markets. Setting a price equal to marginal cost would result in zero profit.