Which of the following is (are) true?
A) According to the text, perfect competition is a goal toward which an economy should strive.
B) Monopolistic competition results in excess capacity, since in the long run MR = MC to the left of the minimum of the ATC curve.
C) One might characterize monopolistic competition as an industry, such as gasoline stations, which in the long run experiences economic profits.
D) All of the above are true.

Question

Quizplus · Accepted Answer

The statement in option A is not mentioned in the text. Option B is true as excess capacity is a feature of monopolistic competition. Option C is incorrect as monopolistic competition in the long run results in zero economic profits due to entry of new firms. Hence, only option B is true.

Which of the Following Is (Are) True