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    Question

    Which of the following statements is incorrect regarding monopolistic competition?

    A No excess capacity with Price = AC Correct Answer Incorrect Answer
    B In case of monopolistic competition, there are only normal profits in the long run and there is no excess capacity. Correct Answer Incorrect Answer
    C LMC=LAC at the minimum point of the latter Correct Answer Incorrect Answer
    D Consumer surplus reduces Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    In case of monopolistic competition, there are only normal profits in the long run but there is excess capacity.

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