Monopolistic competition provides the benefit of product variety but at the cost of productive inefficiency.

Name: Monopolistic competition provides the benefit of product variety but at the cost of productive inefficiency.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

In monopolistic competition, firms differentiate their products, leading to a variety of choices for consumers. However, this differentiation and the lack of perfect competition often result in firms not producing at the lowest possible cost, causing productive inefficiency.

Monopolistic Competition Provides the Benefit of Product Variety but at the Cost