Monopolistic Competition Is Characterized by Excess Capacity Because

question 167

Multiple Choice

Monopolistic competition is characterized by excess capacity because

• A) firms are always profitable in the long run.
• B) firms charge a price that is greater than marginal cost.
• C) firms produce at an output level less than the least-cost output.
• D) the demand for the product is perfectly elastic in this type of industry.

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Definitions:

Competency

The combination of knowledge, skills, and behaviors that is required for effective performance in a given role or job.

Collective Learning

The process by which a group acquires knowledge and skills through shared experiences, leading to improvement in performance or understanding.

Outsourcing

The business practice of hiring external parties to perform services or create goods that traditionally were performed in-house by the company's own staff.

Standards of Service

Benchmarks set by an organization to measure the quality of service delivered to its customers, ensuring consistency and satisfaction.