Question

    Excess Capacity is not found in?

    A Monopoly Correct Answer Incorrect Answer
    B Monopolistic Competition Correct Answer Incorrect Answer
    C Oligopoly Correct Answer Incorrect Answer
    D Perfect Competition Correct Answer Incorrect Answer

    Solution

    Under perfect competition, each firm produces at the minimum point on its LAC curve and its horizontal demand curve is tangent to it at that point. Its output is ideal and there is no excess capacity in the long-run.

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