Which of the following is (are) true?
A) One can criticize monopolistic competition because it falls short of the efficiency standards of perfect competition.
B) Monopolistic competition is inefficient because of product differentiation.
C) According to the text, the inefficiency of monopolistic competition may be a small price to pay for the wide range of product choices it offers.
D) All of the above are true.

Question

Quizplus · Accepted Answer

All the statements are true regarding monopolistic competition. It is criticized for not being as efficient as perfect competition due to product differentiation, which leads to inefficiencies. However, the text suggests that these inefficiencies might be considered a small price for the benefit of having a wide variety of products.

Which of the Following Is (Are) True