Excess Capacity in Monopolistically Competitive Industries Results Because in Equilibrium

question 84

Multiple Choice

Excess capacity in monopolistically competitive industries results because in equilibrium:

• A) each firm's output level is too great to minimize average cost.
• B) each firm's output level is too small to minimize average cost.
• C) firms make positive economic profit.
• D) price equals marginal cost.

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A mathematical statement asserting the equality of two expressions, typically involving one or more variables.

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Equation

A mathematical proposition that claims equality between two expressions, generally involving variables.