Which of the following statements is false?
A)The monopolistic competitor, like the perfectly competitive firm, is resource-allocative efficient.
B)The monopolistic competitor produces that quantity of output at which price equals marginal cost.
C)The monopolistic competitor produces the quantity of output with the lowest per-unit costs.
D)a, b, and c

Question

Quizplus · Accepted Answer

All the statements are false. A monopolistic competitor is not resource-allocative efficient because it does not produce at the point where price equals marginal cost. Instead, it produces at a point where price is greater than marginal cost, leading to a deadweight loss. Additionally, a monopolistic competitor does not necessarily produce at the lowest per-unit cost, which would be at the minimum of the average total cost curve, but rather at a point where marginal revenue equals marginal cost, which does not guarantee minimum per-unit costs.

Which of the Following Statements Is False