Explain how selling costs in monopolistic competition affect the ...

[drink]

Explain how selling costs in monopolistic competition affect the efficiency of monopolistic competition.
 
  What will be an ideal response?

Question 2

All of the following are programs that redistribute income by making direct payments to people in the lower part of the income distribution EXCEPT
 
  A) social security programs.
  B) welfare programs.
  C) Individual Retirement Accounts.
  D) unemployment compensation.

[phuda]

Answer to Question 1

The additional selling costs from product differentiation and marketing increase consumer choice by providing variety. This benefits society and weighs in favor of the efficiency of monopolistic competition. However, selling costs can add to the product's price. Also, at times the product differentiation is more apparent than real. These factors harm society and count against the efficiency of monopolistic competition.

Answer to Question 2

C

[drink]

TYSM

[smrtceo]

Gracias!