Monopolistic Competition Is Judged to Be Economically Inefficient Because

question 151

Multiple Choice

Monopolistic competition is judged to be economically inefficient because

• A) the price is greater than marginal cost.
• B) firms make zero economic profit in the long run.
• C) marginal revenue equals marginal cost.
• D) firms have deficient capacity in the long run.
• E) firms make an economic profit in the long run.

---

Definitions:

Attorney

A person licensed to practice law and represent clients in legal matters.

Consumer Surplus

The variance between the total price consumers are inclined and able to pay for a good or service, compared to what they really pay.

Price Ceilings

A government-imposed limit on how high a price can be charged for a product, service, or resource, aimed at protecting consumers from excessive pricing.

Demand Curve

An illustrative depiction that demonstrates the connection between a product's price and the amount consumers are willing to purchase at various price levels.