One source of inefficiency in monopolistic competiti... - Solved MCQs & Answer

3256EconomicsMedium

One source of inefficiency in monopolistic competition is that since price is above marginal cost, some units are not produced that buyers value in?

Amonopolistically competitive firms earn economic profits in the long run

Bmonopolistically competitive firms produce beyond their efficient scale

Cexcess of the cost of production and this causes a deadweight loss.

DSince price is above marginal cost surplus is redistributed from buyers to sellers

Correct answer

C. excess of the cost of production and this causes a deadweight loss.

Explanation

The correct answer is excess of the cost of production and this causes a deadweight loss..

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