Q270
Excess capacity is not found under
A.
Monopoly
B.
Monopolistic competition
C.
Perfect competition
AnswerD.
Oligopoly
Answer: Option C
Solution
Answer: Option C
Solution:
Excess capacity is not found under Perfect competition. Under perfect competition, each firm produces at the minimum point on its LAC curve and its horizontal demand curve is tangent to it at that point. Its output is ideal and there is no excess capacity in the long-run.