Which of the following is correct?
A. The excess capacity problem diminishes as the monopolistically competitive firm's demand curve becomes less elastic.
B. The excess capacity problem means that monopolistically competitive firms typically
produce at some point on the rising segment of their average total cost curve.
C. The greater the degree of product variation, the lesser is the excess capacity problem.
D. The greater the degree of product variation, the greater is the excess capacity problem.
Answer: D
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