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Pavlos Tsoump
on Nov 16, 2024

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Monopolistic competition is considered inefficient because

A) price exceeds marginal cost.
B) output is excessive.
C) long-run profits are positive.
D) barriers to entry limit the number of firms in the market.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing them to have some control over their prices.

Inefficient

A term describing processes or allocations of resources that do not maximize output or where inputs are not utilized in the best manner possible.

Marginal Cost

Marginal cost is the change in total cost that arises when the quantity produced is incremented by one unit.

  • Review the impact on welfare due to monopolistic competition, considering the inefficiencies and externalities involved.
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JP
Jason PhouthavongNov 19, 2024
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