When weighing the efficiency of monopolistic competition,which of the following should be considered?
i.the information provided by advertising
ii.product variety
iii.the extra cost of excess capacity
A) ii only
B) i and iii
C) ii and iii
D) i, ii, and iii
E) iii only

Question

Quizplus · Accepted Answer

When evaluating the efficiency of monopolistic competition, it's important to consider all three factors: the information provided by advertising (which can make markets more efficient by informing consumers), product variety (which can increase consumer welfare), and the extra cost of excess capacity (which represents an inefficiency in production).

When Weighing the Efficiency of Monopolistic Competition,which of the Following