The problem of wasteful duplication in monopolistic competition is due to:
A)excess capacity.
B)a lack of physical and human capital.
C)barriers to entry.
D)the lack of close substitutes for products produced by monopolistically competitive firms.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms have excess capacity due to the desire to create differentiated products, leading to wasteful duplication. This excess capacity results in higher costs for firms and ultimately higher prices for consumers.

The Problem of Wasteful Duplication in Monopolistic Competition Is Due