Excess Capacity in Monopolistically Competitive Firms Occurs Because

Excess capacity in monopolistically competitive firms occurs because

A) each firm faces a demand that is perfectly elastic.
B) each firm builds a huge plant.
C) the existence of slightly differentiated products,serving almost the same purpose,causes a waste of precious natural resources.
D) firms produce an output that is less than the output at minimum average total cost.
E) marginal cost is too high.