It Has Been Argued That a Monopolistically Competitive Industry Involves

question 254

Multiple Choice

It has been argued that a monopolistically competitive industry involves "waste" because

• A) there is too much product differentiation making shelves too crowded.
• B) they end up producing to the right of the minimum of the average total cost curve and the price is below the marginal cost.
• C) the firms do not equate marginal cost to marginal revenue to find the profit maximizing price and output.
• D) the firms do not produce at the minimum of the average total cost curve and price is above marginal cost.

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