Which of the Following Statements Regarding Monopolist Competition Is FALSE

question 17

Multiple Choice

Which of the following statements regarding monopolist competition is FALSE?

• A)Resources are used efficiently when marginal social benefit equals marginal social cost.
• B)A greater degree of product variety creates a loss because the quantity produced is less than the efficient quantity.
• C)Monopolistic competition is definitely inefficient because price exceeds marginal cost.
• D)Compared to a situation with total product uniformity, monopolist competition might be efficient.
• E)A firm in monopolistic competition produces a quantity that is less than the efficient scale.

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Definitions:

Direct Labour Hour

A measure of the amount of time a worker spends on direct production activities.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels within a business.

Volume Variance

The difference between the expected volume of production or sales and the actual volume, affecting budget and performance analysis.

Fixed Overhead

Fixed overhead refers to the indirect costs of production that remain constant regardless of the level of output, such as rent, salaries, and insurance.