Discussion
X : The extra expenditure incurred by a firm on competitive advertisement is selling cost.
Y : There are several wastes under monopolistic competition.
Answer: C
Both X and Y are correct.
Selling cost is expenditure incurred to change the demand for a product, chiefly advertising and sales promotion; Chamberlin introduced the idea, and competitive advertising by rival firms is its standard example (statement X).
Monopolistic competition is also said to involve several wastes: excess capacity, because each firm produces short of the minimum point of its average cost curve; competitive advertising that largely cancels out; too many firms and brands; and cross-transport. That is statement Y, so both are true.
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