What is the trade-off that consumers face when buying the product of a monopolistically competitive firm?
A) Consumers pay higher prices but the products are produced by highly efficient firms.
B) Consumers pay lower prices but have fewer choices.
C) Consumers pay a price greater than marginal cost, but have the luxury of choices more suited to their tastes.
D) Consumers pay higher prices but receive better quality goods compared to the output of perfectly competitive firms.
C
You might also like to view...
Samantha goes to college to become an engineer. This is an example of an
A) investment in physical capital. B) investment in human capital. C) increase in entrepreneurship D) increase in labor.
Suppose fiscal authorities raise state income tax rates. As a result, disposable income falls, thereby
A) decreasing consumption spending, and causing the aggregate demand curve to shift to the left. B) decreasing consumption spending, and causing a movement along a given aggregate demand curve. C) increasing saving, and causing the aggregate demand curve to shift to the left. D) increasing saving, and causing a movement along a given aggregate demand curve.