The economic inefficiencies of monopolistic competition may be offset by the fact that:

A) advertising expenditures shift the average cost curve upward.
B) available capacity is fully utilized.
C) resources are optimally allocated to the production of the product.
D) consumers have increased product variety.

Monopolistic Competition

Monopolistic competition is a market structure characterized by many producers selling products that are similar but not identical, allowing for some degree of market power and product differentiation.

Economic Inefficiencies

Situations where resources are not used optimally according to consumer preferences, often leading to wasted resources or unmet demands.

Product Variety

Refers to the different types and variations of products available in a market or offered by a company.