According to the Excess Capacity Theorem, If Every Firm Under

question 34

Multiple Choice

According to the excess capacity theorem, if every firm under monopolistic competition expanded its output,

• A)cost per unit of output would rise.
• B)social benefits would increase.
• C)cost per unit of output would decrease.
• D)MC and AC would remain unchanged.

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Definitions:

Standard Oil

An American oil producing, refining, and transporting company established by John D. Rockefeller that became a symbol of the monopolistic practices and economic power of the Gilded Age.

John D. Rockefeller

An American industrialist and philanthropist who played a pivotal role in the establishment and growth of the oil industry.

Settlement House Movement

A social reform movement that began in the late 19th and early 20th centuries, aimed at improving the lives of the poor by establishing community centers in urban areas.

Hull House

A settlement house founded by Jane Addams and Ellen Gates Starr in 1889 in Chicago, aimed at improving social and living conditions for immigrants and the poor.