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Impare monopolistically competitive industries with perfectly competitive industries in the long run. Which industry structure is more​ efficient? Compared to perfect​ competition, monopolistically competitive industries are A. less efficient because price is greater than marginal cost. B. more efficient because average cost is minimized. C. less efficient because marginal revenue is greater than marginal cost. D. more efficient because there is excess capacity. E. less efficient because there are fixed costs.

Respuesta :

Answer:

The correct answer is option A.

Explanation:

A perfectly competitive firm is a price taker. It has a horizontal line demand curve. It charges a price equal to its marginal cost of production and margianl revenue.

While a monopolistic firm is a price maker. It faces a downward sloping curve.  It charges a price that is higher than its marginal cost and marginal revenue. So, it is not allocatively efficient.

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