Final answer:
The correct answer is E. A and C only. Advertising decreases search and information costs. Monopolistically competitive markets have high barriers to entry.
Step-by-step explanation:
The correct answer is E. A and C only. Statement A is true because advertising in monopolistic competition helps firms to differentiate their products and attract customers, reducing the need for consumers to search and gather information about different options. Statement C is also true because monopolistically competitive markets typically have lower barriers to entry compared to other market structures like monopolies or oligopolies. This is because there are many firms operating in monopolistic competition, allowing for easier entry and exit into the market. On the other hand, statement B is false. Excess capacity occurs when a monopolistically competitive firm sets output below the output that minimizes average total cost, not above it.