Which is the most accurate statement?

A) In monopolistically competitive industries there are generally too many firms.
B) One of the main problems with monopolistic competition is the lack of variety among goods and services.
C) Most firms in the United States are monopolistic competitors.
D) The biggest problem with monopolistic competition is over-differentiation.

Over-Differentiation

refers to the creation of product variations that exceed customer needs or desires, potentially leading to confusion and reduced sales.

Monopolistically Competitive Industries

Industries in which many firms compete by selling products that are similar but not identical, allowing for product differentiation.

Lack of Variety

A situation in a market where there are few different options or types of products available to consumers, potentially leading to decreased consumer satisfaction.