1393EconomicsMedium
Which of the following is true with regard to monopolistically competitive firms scale of production and pricing decisions Monopolistically competitive firms produce?
AWith excess capacity and charge a price above marginal cost
BWith excess capacity and charge a price equal to marginal cost
Cat the efficient scale and charge a price equal to marginal cost
Dat the efficient scale and charge a price above marginal cost
Correct answer
A. With excess capacity and charge a price above marginal cost
Explanation
The correct answer is With excess capacity and charge a price above marginal cost.