Why Does a Monopolistically Competitive Industry Result in a Lower

Why does a monopolistically competitive industry result in a lower level of output than does perfect competition?

A) Because the government regulates prices to ensure a fair rate of return
B) Because marginal costs are increasing
C) Because there are high barriers to entry
D) Because firms face downward-sloping demand, the output level at which Price = Average total cost is less than the output level at which Price = Marginal cost

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