One Source of Economic Inefficiency from Monopolistic Competition Is

question 94

Multiple Choice

One source of economic inefficiency from monopolistic competition is

• A) markup.
• B) less variety for consumers.
• C) more variety for consumers.
• D) higher costs because firms can enter the industry.
• E) lower marginal costs,but higher average costs than with perfect competition.

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Definitions:

Standard of Living

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

Saving

The process of setting aside a portion of current income for future use, either by depositing money in a bank or purchasing financial instruments.

Benefits-Received Principle

A theory of fairness holding that taxpayers should contribute to government (in the form of taxes) in proportion to the benefits they receive from public expenditures.

Public Goods

Items whose consumption is not depleted by an additional consumer and from which individuals cannot be excluded from using.