When weighing the efficiency of monopolistic competition, which of the following should be considered? i. The information provided by advertising.
Ii) Product variety.
Iii) The extra cost of excess capacity.
A) i, ii and iii
B) ii only
C) ii and iii
D) i and iii
E) iii only

Question

Quizplus · Accepted Answer

All three factors should be considered when weighing the efficiency of monopolistic competition. Advertising provides important information to consumers about product differentiation, product variety is a defining characteristic of monopolistic competition, and excess capacity can lead to inefficiencies in production and higher costs.

When Weighing the Efficiency of Monopolistic Competition, Which of the Following