Which statement best describes the outcome under monopolistic competition?

1. A Option A: It is efficient because the right amount of output is produced, but inefficient because output is produced at a cost above minimum average total cost
2. B Option B: It is not efficient because too little output is produced and that output is produced at a cost above minimum average total cost
3. C Option C: It is efficient because entry is free and economic profits are eliminated in the long run
4. D Option D: It is not efficient because too little output is produced, but it is efficient because output is produced at minimum average total cost

Answer checked 11 October 2026 · How we write and check questions