In monopolistic competition, there is inefficiency because price is greater than marginal cost. What brings about this inefficiency?
A) high concentration, as indicated by the large concentration ratio
B) product differentiation
C) freedom of entry and exit
D) marginal cost rises as more output is produced
E) the fact there are many firms in the market
B
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What will be an ideal response?
The relationship between interest rates and investment spending is graphed as
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An important reason why diseconomies of scale arise is because firms may have to hire lower-skilled workers as firms expand
Indicate whether the statement is true or false