Because of One Assumption in the Theory of Monopolistic Competition

question 172

Multiple Choice

Because of one assumption in the theory of monopolistic competition, the excess capacity theorem exists. What is the assumption?

• A)There are many sellers and buyers.
• B)Each firm produces and sells a slightly differentiated product.
• C)There is easy entry into the industry.
• D)There is easy exit from the industry.

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Definitions:

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