Which of the following best describes the idea of excess capacity in monopolistic competition?
a. Firms produce more output than is socially desirable.
b. The output produced by a typical firm is less than what would occur at the minimum point on its ATC curve.
c. Due to product differentiation, firms choose output levels at which P > ATC.
d. Firms keep some surplus output on hand in case there is a shift in demand for their product.
e. The collective output of all firms in the market typically exceeds the quantity demanded.
B
You might also like to view...
Recently, many developing countries throughout the world have begun to institute policies that seek to
A) liberalize international trade by lowering trade barriers. B) reduce dependence on international trade by raising trade barriers. C) reduce dependence on international trade by instituting laws that call for buying only domestically made goods. D) Two of the above.
The supply of loanable funds curve is downward sloping
a. True b. False
If the quantity desired of something exceeds the amount available at zero price, that item is called
A. a bad. B. capital. C. an intangible good. D. an economic good.
Profit per unit is the difference between
A. total revenue and total cost. B. marginal revenue and marginal cost. C. average revenue and average total cost. D. average revenue and marginal cost.