Asked by Julie Prine on May 30, 2024
Verified
Monopolistic competition in an industry will result in _____ because firms produce _____.
A) overutilization of plants;the minimum-cost output
B) less advertising than in perfect competition;the minimum-cost output
C) lower prices than in perfect competition;more than the minimum-cost output
D) chronic excess capacity;less than the minimum-cost output
Monopolistic Competition
A market structure featuring many firms selling products that are similar but not identical, allowing for competition based on quality, price, and marketing.
Chronic Excess Capacity
A persistent situation in which industries or firms have more production capacity available than is being used, often leading to economic inefficiencies and reduced profit margins.
Minimum-Cost Output
The quantity of output at which the average total cost is lowest—the bottom of the U-shaped average total cost curve.
- Absorb the concepts related to overcapacity and economic advantages in different market environments.
- Differentiate between perfect competition and monopolistic competition in terms of pricing, output, and long-run equilibrium.
Verified Answer
Learning Objectives
- Absorb the concepts related to overcapacity and economic advantages in different market environments.
- Differentiate between perfect competition and monopolistic competition in terms of pricing, output, and long-run equilibrium.
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