Even Though Monopolistic Competition Results in Inefficiency,it Does Have Which

question 32

Multiple Choice

Even though monopolistic competition results in inefficiency,it does have which of the following benefits for society?

• A) Firms make zero economic profit in the long run.
• B) Firms can make an economic profit in the short run.
• C) Product variety benefits consumers.
• D) Marginal cost equals price in the long run.
• E) The premise of the question is incorrect because nothing in monopolistic competition justifies any economic inefficiency.

---

Definitions:

Demand Function

A mathematical function showing the quantity of a good demanded at different prices.

Price Elasticity

Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price.

Yen

The official currency of Japan, known internationally by its symbol ¥.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium is not achievable or not achieved in a market.