820EconomicsMedium
Which of the following statements best describes the outcome under monopolistic competition?
AIn monopolistic competition there are too few firms and each firm produce a slightly different product at scale that is greater than optimal
BIn monopolistic competition, there are too many firms and each firm produce a slightly different product at a scale that is less than optimal
Cin monopolistic competition there is the correct number of firm and each firm produces a slightly different product at an optimal scale.
DIn monopolistic competition there are too many firms and each firm produce a slightly different product at the optimal scale
Correct answer
A. In monopolistic competition there are too few firms and each firm produce a slightly different product at scale that is greater than optimal
Explanation
The correct answer is In monopolistic competition there are too few firms and each firm produce a slightly different product at scale that is greater than optimal.