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:

Predict

The act of forecasting future events or conditions based on current knowledge or past experiences.

Describe

The act of giving a detailed account or picture of something in words, including all relevant characteristics, qualities, or events.

Explain

To make something clear or easy to understand by describing or giving information about it.

Behavioral School

A perspective in psychology focusing on observable behaviors and the ways in which learning influences behavior, discounting internal mental processes.