The firm in the diagram has a downward-sloping AR curve and is making normal profit (as AR=AC at the profit-maximising level of output). Monopolistically competitive firms can only make normal profit in the long run.
Choice B is incorrect as perfectly competitive firms have a horizontal AR curve.
Choice C is incorrect as a collusive oligopoly behaving like a monopolist would most likely be earning a supernormal profit.
Choice D is incorrect as the firm in the diagram is making normal profit.
