Monopolistically competitive industries are inefficient because:
A. they realize diseconomies of scale.
B. advertising costs retard technological advance and product development.
C. they are overpopulated with firms whose plants are underutilized.
D. monopolistically competitive sellers engage in misleading advertising.
Answer: C
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The existence of positive externalities indicates that the market is producing too many goods
Indicate whether the statement is true or false
When a monopolistically competitive firm is in long-run equilibrium,
a. price is equal to average total cost. b. price is equal to marginal cost. c. price is equal to marginal revenue. d. the firm operates at its efficient scale.
To produce honey, beekeepers place hives of bees in the fields of farmers. As bees gather nectar, they pollinate the crops in the fields, which increases the yields of these fields at no additional cost to the farmer. What might be a reasonable private solution to this externality, and how might the solution be reached?
Since the 1940's U.S. union membership has
a. fallen. This decline should have reduced structural unemployment. b. fallen. This decline should not have reduced structural unemployment. c. risen. This increase should have raised structural unemployment. d. risen. This increase should not have raised structural unemployment.