The Excess Capacity Theorem States That a Monopolistic Competitor

Multiple Choice

The excess capacity theorem states that a monopolistic competitor

A) will produce an output level smaller than the one that would minimize its unit costs.
B) will produce an output level where MR > MC.
C) generally does not attain long run equilibrium, and thus charges a higher price than it should.
D) typically produces too much of a good at too low a quality.