What did Harvard economist Edward Chamberlain say about the observation that a monopolistically competitive firm's average cost of production exceeds its minimum average total cost?
A) Chamberlain argued that these higher costs represent the wastefulness of this market structure.
B) Chamberlain argued that this belief is incorrect. In his view, monopolistically competitive firms do not produce at a cost above their minimum average total costs.
C) According to Chamberlain, this cost difference represents the value consumers place on variety and having more choice.
D) In Chamberlain's view, this is evidence that monopolistic competition uses society's resources inefficiently and in a fashion that merits government intervention.
C
You might also like to view...
Which of the following offers an example of structural unemployment?
a. The rise in unemployment for stable workers after the development of gasoline-powered automobiles and the resulting long-term decline in horse-and- buggy transportation. b. The rise in unemployment among farm workers after harvest. c. The unemployment associated with workers changing jobs. d. The increase in unemployment during recessions.
Suppose the government increases the size of a tax by 20 percent. The deadweight loss from that tax
a. increases by 20 percent. b. increases by more than 20 percent. c. increases but by less than 20 percent. d. decreases by 20 percent.