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Government Intervention in Monopolistically Competitive Industries Is Probably Not Warranted

Question 34

Multiple Choice

Government intervention in monopolistically competitive industries is probably not warranted because:


A) monopolistic firms produce the efficient level of output.
B) deadweight losses from monopolistic competition are hard to quantify.
C) the cost of regulation may be higher than the deadweight loss.
D) price regulation usually leads to a decline in total surplus.

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