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Excess Capacity Best Describes the Fact That

Question 86

Multiple Choice

Excess capacity best describes the fact that


A) monopolistically competitive firms produce less than the cost-minimizing level of output.
B) monopolistically competitive firms produce more than the cost-minimizing level of output.
C) monopolistically competitive firms produce exactly the cost-minimizing level of output,but the monopolistically competitive industry produces more than that amount.
D) monopolistically competitive firms could produce less if they wanted to,so they produce more than the optimal capacity.
E) perfectly competitive firms produce less than the cost-minimizing level of output so they have excess capacity,but monopolistically competitive firms do not.

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