Monopolistic competition is characterized by excess capacity because
A) firms are always profitable in the long run.
B) firms charge a price that is greater than marginal cost.
C) firms produce at an output level less than the least-cost output.
D) the demand for the product is perfectly elastic in this type of industry.
Correct Answer:
Verified
Q225: Excess capacity implies
A)productive inefficiency.
B)allocative inefficiency.
C)productive efficiency.
D)allocative efficiency.
Q226: Q227: A significant benefit of monopolistic competition compared Q228: In monopolistic competition there is an underallocation Q229: Product variety is likely to be greater Q231: Keely says that he's glad that his Q232: In long-run equilibrium, a monopolistically competitive producer Q233: Which of the following statements is correct? Q234: The economic inefficiencies of monopolistic competition may Q235: 
A)There
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