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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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