Question

True or False: This indicates that there is excess capacity in the market for bats. True False Monopolistic competition may also be socially inefficient because there are too many or too few firms in the market. The presence of theproduct variety externality implies that there is too much entry of new firms in the market.

Answer 1

False

False

Step-by-step explanation:

Monopolistic competition is a type of imperfect market where there are many seller competing with each other but with differentiated products. Monopolistic competition is socially inefficient. The product variety externality implies that there is too little entry of new firms in the market.