Monopolistic competition within an industry will result in ________, because firms produce _.
A)the overutilization of plants; the minimum-cost output
B)less advertising than in perfect competition; the minimum-cost output
C)lower prices than in perfect competition; more than the minimum-cost output .
D)chronic excess capacity; less than the minimum-cost output

Question

Quizplus · Accepted Answer

Monopolistic competition results in excess capacity because firms in this type of market structure have some degree of market power, but are unable to fully monopolize the market. As a result, they do not produce the minimum-cost output level and have unused capacity.

Monopolistic Competition Within an Industry Will Result in ________, Because