Monopolistic competition is characterized by
i.efficient scale
ii.markup pricing over marginal cost
iii.deadweight loss
iv.excess capacity
A)i) and ii) only
B)ii) and iv) only
C)i), ii), and iii) only
D)ii), iii), and iv) only

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by markup pricing over marginal cost (ii), deadweight loss (iii), and excess capacity (iv). Firms in monopolistic competition do not produce at efficient scale, leading to excess capacity and deadweight loss.

Monopolistic Competition Is Characterized by