Excess capacity is the
A) difference between a perfectly competitive firm's and a monopolistically competitive firm's output.
B) difference between a perfectly competitive firm's and a monopoly's output.
C) output at the maximum point of the ATC curve.
D) difference between the price charged by a monopoly and a monopolistically competitive firm with the same costs.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

Excess capacity refers to the situation where a firm is not producing at its minimum average total cost (ATC), which is not specifically described by any of the options provided. The options describe differences in outputs and prices between different market structures, but not the concept of excess capacity directly.

Excess Capacity Is the