Which statement is TRUE?

A) Monopolistic competition and perfect competition are both inefficient.
B) Monopolistic competition is efficient because of product differentiation.
C) The inefficiency of monopolistic competition is arguably a small price to pay for the wide range of product choices it offers.
D) The inefficiency of monopolistic competition is a result of advertising expenses.

Monopolistic Competition

A market structure characterized by many firms offering products that are similar but not identical, leading to competition based on product differentiation, prices, and marketing.

Perfect Competition

A market structure characterized by a large number of sellers and buyers, homogeneous products, and no barriers to entry or exit.

Product Differentiation

A marketing strategy that businesses use to distinguish their product from similar offerings on the market.