One source of inefficiency in monopolistic competition is that
A) Since price is above marginal cost, surplus is redistributed from buyers to sellers.
B) Monopolistically competitive firms earn economic profits in the long run.
C) Monopolistically competitive firms produce beyond their efficient scale.
D) Since price is above marginal cost, some units are not produced that buyer's value in Excess of the cost of production and this causes a deadweight loss.
Correct Answer:
Verified
Q27: The use of the word "competition" in
Q29: Exhibit 4 depicts a monopolistically competitor firm,
Q30: To maximize its profit, a monopolistically competitive
Q31: In the long run under monopolistic competition,
Q33: Which of the following is true with
Q34: There are several reasons why demand curves
Q35: When firms enter a monopolistically competitive market
Q37: If the monopolistic competitor firm described by
Q251: Which of the following conditions is characteristic
Q554: Monopolistic competition differs from perfect competition because
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents