It is generally observed that a firm under monopolistic competition, produces an excess quantity. In your view, is it a wastage of scarce resources?
It is correct that firm under monopolistic competition generates an excess quantity, however it is not a wastage of scarce resources as firms under this form of market produces differentiated goods.
So, there are certain consumers who always prefer to consume goods of a particular brand or quality. Hence firm’s output will be sold and there will be no wastage. Also, it helps firms to meet with unforeseen circumstances.