Which of the following statements is true?
A)Monopolistic competitive firms do not experience the law of diminishing marginal returns when they produce output.
B)Monopolistic competitive firms face a downward-sloping demand curve and a horizontal marginal cost curve.
C)There are many buyers and few sellers in the theory of monopolistic competition.
D)Monopolistic competitors are said to underutilize their present plant size.

Question

Quizplus · Accepted Answer

Monopolistic competitors often have excess capacity, meaning they do not produce at the minimum point of their average total cost curve, leading to underutilization of their plant size.

Which of the Following Statements Is True