Product development is efficient if the marginal social cost of a new and improved product ________ its marginal social benefit. In monopolistic competition marginal revenue is less than price,so product development is probably ________ to its efficient level.

Question

Quizplus · Accepted Answer

Product development is efficient when the marginal social cost equals the marginal social benefit. In monopolistic competition, due to the nature of pricing and marginal revenue, product development is not pushed to its efficient level.

Product Development Is Efficient If the Marginal Social Cost of a New