In the long run the equilibrium point of a mono... - JAMB Economics 2005 Question

In the long run, a monopolistic firm's equilibrium occurs where the demand curve is tangent to the average cost curve. This is because in the long run, firms can adjust their plant size. They will operate at the point where they achieve the lowest possible average cost given the market demand. The tangency point signifies that the firm is producing at an output level where its average cost is minimized, but still earning only normal profit (economic profit of zero).