One Source of Inefficiency in Monopolistic Competition Is That

question 13

Multiple Choice

One source of inefficiency in monopolistic competition is that

• A) Since price is above marginal cost, surplus is redistributed from buyers to sellers.
• B) Monopolistically competitive firms earn economic profits in the long run.
• C) Monopolistically competitive firms produce beyond their efficient scale.
• D) Since price is above marginal cost, some units are not produced that buyer's value in Excess of the cost of production and this causes a deadweight loss.

---

Definitions:

Big Business

Large-scale or major corporations that hold significant influence and power in the economy and political landscape.

Economic Uncertainty

A situation where there is a lack of predictability or stability in the economic future, often leading to cautious financial planning and investments.

New Deal

A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States during the 1930s, designed to help the country recover from the Great Depression.

Shopping Mall

is a large indoor or outdoor complex that houses a variety of stores, restaurants, and other service businesses, where individuals can shop for a wide range of products.