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Unformatted text preview: capacity, it
produces a smaller output than that which
minimizes average total cost.
This means consumers pay a price exceeding
minimum average total cost. Excess Capacity
180 MC ATC 160
output MR D
50 100 150
Quantity Efficiency and Product
Is product innovation an efficient
There are two views:
– Improved products that bring
great benefits to the consumer.
– Many so-called improvements
amount to little more than
changing the appearance of a
product. Monopolistic Competition
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This document was uploaded on 03/13/2014.
- Winter '13
- Monopolistic Competition