Economists generally agree that monopolistically competitive firms should be regulated in order to increase economic efficiency.

Question

Quizplus · Accepted Answer

Economists generally do not agree that monopolistically competitive firms need to be regulated in order to increase economic efficiency. Rather, they argue that competition itself can regulate these firms and ensure that they produce at socially optimal levels. In fact, excessive regulation can be counterproductive by reducing competition and innovation.

Economists Generally Agree That Monopolistically Competitive Firms Should Be Regulated