A monopolistically competitive industry may feature a. excess capacity. b. extraordinary profits. c. product differentiation. d. All of the above are correct. e. Only b and c are correct.

The answer is D All of the above are correct

Explanation:

Monopolistic Competition is similar to perfect competition in all ways EXCEPT that the products in monopolistic Competition are DIFFERENTIATED and with this, firms have some pricing power.

Like perfect competition, there are many buyers and sellers; the products offered by another seller are close substitutes for the products offered by other firms; there is free entry and exit.

Because firms in this market have some pricing power, extraordinary profit is possible in the short run but because the barriers to entry is minimal, in the long run many firms will enter and drive down the profit.

There is also excess capacity (which is a situation in which the demand for a company's product is less than its productive capacity.

c.

clarify customers’ doubts only when asked.