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AP® Microeconomics

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Monopolistic Competition Inefficiency

APMICR-BNY5GF

Monopolistic competitors are inefficient for all of the following reasons EXCEPT

A

They produce with excess capacity.

B

They fail to achieve productive efficiency.

C

They incur a deadweight loss in production.

D

They fail to earn more than normal profit in the long run.

E

They produce less and charge a higher price than perfect competitors.