Draw adiagramto show thelong-run equilibriumof a firm inMonopolistically Competitivemarket. (Clearly label MR, AR, ATC and MC). Show the profit maximizing level of Q and P. Is P less than or greater than ATC? Is P greater or less than MC? How much profit firm is earning in the long run?

Referring to the diagram in above, does a monopolistically competitive firm produce more or less output compared to the most efficient level? Explain why it does not produce at the most efficient level.