From a total welfare perspective, it is possible that too many firms can enter into a monopolistically competitive market.

Name: From a total welfare perspective, it is possible that too many firms can enter into a monopolistically competitive market.
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Question

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When too many firms enter a monopolistically competitive market, the market becomes overly crowded, leading to increased costs of advertising and product differentiation. This, in turn, can lead to higher prices for consumers and reduced overall welfare.

From a Total Welfare Perspective, It Is Possible That Too