In monopolistic competition, why is the quantity produced not allocatively efficient?

• A. Because the quantity produced is where average total cost is minimized.
• B. Because the quantity produced is where price equals marginal cost.
• C. Because the quantity produced is where marginal revenue equals marginal cost, not where marginal benefit equals marginal cost.
• D. Because the quantity produced is where marginal cost equals marginal benefit.

Answer: (C)