Which of the following is a similarity between monopolistic competition and monopoly?
A) Both produce unique products.
B) Both produce at the socially optimal output level.
C) Neither of them face elastic demand curves.
D) Both produce at an output level that is less than the minimum average total cost.

Question

Quizplus · Accepted Answer

Both monopolistic competition and monopoly produce at an output level that is less than the minimum average total cost due to the presence of market power and downward-sloping demand curves, leading to inefficiencies.

Which of the Following Is a Similarity Between Monopolistic Competition