Which of the following would NOT cause the costs in a monopolistically competitive industry to be higher than those in a perfectly competitive industry?

Question

Quizplus · Accepted Answer

A large number of competitors would actually cause costs to be lower in a monopolistically competitive industry compared to a perfectly competitive industry, as firms would have to keep their prices and costs low to remain competitive. Advertising expenditures and marketing costs necessary to differentiate a product are typical features of a monopolistically competitive industry and would contribute to higher costs. The ability to control the price of the product so costs can be allowed to rise is also a feature of a monopolistically competitive industry, as firms have some degree of market power to set prices higher than their competitors.

Which of the Following Would NOT Cause the Costs in a Monopolistically