Which of the following is NOT regarded as a source of inefficiency in monopolistic competition?
A) The fact that price exceeds marginal cost
B) Excess capacity
C) Product diversity
D) The fact that long-run average cost is not minimized
E) all of the above

Question

Quizplus · Accepted Answer

Product diversity is actually a characteristic of monopolistic competition, not a source of inefficiency. The other options, price exceeding marginal cost, excess capacity, and failure to minimize long-run average cost, all contribute to inefficiency in monopolistic competition.

Which of the Following Is NOT Regarded as a Source