Wastes of Monopolistic Competition: 

Generally there are five kinds of wastages under monopolistic competition.

(I) Idle capacity:

1. Un – utilized capacity is the difference between the optimum output that can be produced and the actual output produced by the firm. 

2. In the long run, a monopolistic firm produces delibourately output which is less than the optimum output that is the output corresponding to the minimum average cost. 

3. This leads to excess capacity which is actually as waste in monopolistic competition.

(II) Unemployment:

1. Under monopolistic competition, the firms produce less than optimum output. 

2. As a result, the productive capacity is not used to the fullest extent. 

3. This will lead to unemployment of human resources also.

(III) Advertisement:

1. There is a lot of waste in competitive advertisements under monopolistic competition.

2. The wasteful and competitive advertisements lead to high cost to consumers.

(IV) Too many varieties of Goods:

• The goods differ in size, shape, style and colour. A reasonable number of varieties would be sufficient.

(v) Inefficient firms: Under monopolistic competition, inefficient firms charge prices higher than their marginal cost. Efficient firms cannot drive out the inefficient firms.