Monopolistic Competition Is Characterized by Excess Capacity Because

question 149

Multiple Choice

Monopolistic competition is characterized by excess capacity because:

• A) firms are always profitable in the long run.
• B) firms charge a price that is less than marginal cost.
• C) firms produce at an output level less than the least-cost output.
• D) the demand for a product is perfectly elastic in this type of industry.

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