The Efficiency of Monopolistic Competition

question 49

Multiple Choice

The efficiency of monopolistic competition

• A) is as clear-cut as the efficiency of perfect competition.
• B) depends on whether the gain from extra product variety offsets the selling costs and the extra cost that arises from excess capacity.
• C) comes from its excess capacity.
• D) is eliminated in the long run.
• E) is equal to that of monopoly.

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Definitions:

Prestige

The level of respect, admiration, or esteem that a person, organization, or entity is regarded with, often based on perceived success, achievement, or quality.

Superiority

The state or quality of being superior or better than others, often in skills, performance, or status.

Internal Locus

The belief that one controls their own destiny and outcomes are the result of personal effort and actions.

Control Orientation

An approach or mindset focused on managing or directing the behavior and activities of individuals or groups, often to ensure conformity and achieve specific outcomes.