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igor_vitrenko [27]
3 years ago
13

A monopolistically competitive firm will A. produce an output level that is productively and allocatively efficient. B. have som

e control over its price because its product is differentiated. C. charge the same price as its competitors do. D. always produce at the minimum efficient scale of production.
Business
1 answer:
almond37 [142]3 years ago
8 0

Answer: Option (B) is correct.

Explanation:

Correct option: have some control over its price because its product is differentiated.

A competitive monopolistic firm is not operating efficiently because it doesn't producing at a point where price is equal to the marginal cost or at a minimum point of its average cost curve.

It generally produces lower output and charges higher prices for their differentiated products. Differentiated products are the products which are similar in nature but have slightly different features. So, firms try to make their products different.

Hence, the firms have some control over the price of the differentiated products.

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