A monopolistically competitive firm _________ compared to a perfectly competitive firm because it sells a ___________ product.
A) achieves lower total economic surplus;differentiated
B) achieves higher total economic surplus;differentiated
C) achieves lower total economic surplus;homogeneous
D) achieves higher total economic surplus;homogeneous
E) achieves lower total economic surplus;small

Question

Quizplus · Accepted Answer

A monopolistically competitive firm achieves lower total economic surplus compared to a perfectly competitive firm because it sells a differentiated product, leading to inefficiencies and excess capacity.

A Monopolistically Competitive Firm _________ Compared to a Perfectly Competitive