Question

If we believe that "variety is the spice of life," then we should be more concerned about the excess capacity in monopolistic competition and do our best to eliminate it.

A. True
B. False

Answer 1

Answer:

B) False

Explanation:

One of the main characteristics of monopolistic competition is that many suppliers sell products that are different from one another, so they cannot be considered perfect substitutes. For example, restaurants usually operate under monopolistic competition since they all offer similar services but at the same time they are all different.

So if you like variety, then you should like monopolistic competition.