In the long run,firms in monopolistic competition produce at a level that is ________ the efficient scale of output.

Question

Quizplus · Accepted Answer

Firms in monopolistic competition will always produce at a level less than the efficient scale of output. This is because in monopolistic competition, firms have market power and can charge a price above marginal cost, which results in a lower quantity produced compared to perfect competition.

In the Long Run,firms in Monopolistic Competition Produce at a Level