"It Is Clear from the Theory of Monopolistic Competition That

Multiple Choice

"It is clear from the theory of monopolistic competition that product development is not pushed to its efficient level." This statement is

A) false because there is so much product differentiation in monopolistic competition.
B) true because there is little incentive to innovate in monopolistic competition.
C) false because there are so many wasteful innovations in monopolistic competition that are merely cosmetic.
D) true because price exceeds marginal revenue in monopolistic competition.