When P MC in a monopolistically competitive market, that industry will most likely produce _______ than would be found in a perfectly competitive industry.
Benefits to society of providing additional quantity as measured by the price that people are willing to pay exceeds the marginal costs to society of producing those units.

Question

When P > MC in a monopolistically competitive market, that industry will most likely produce _______ than would be found in a perfectly competitive industry.
Benefits to society of providing additional quantity as measured by the price that people are willing to pay exceeds the marginal costs to society of producing those units.

Quizplus · Accepted Answer

In a monopolistically competitive market, firms have some power to set prices above marginal cost, leading to a lower quantity of goods produced and higher prices compared to a perfectly competitive market where P = MC.

When P > MC in a Monopolistically Competitive Market, That