Firms may easily enter a monopolistically competitive market.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, there are many firms that produce differentiated products, which means that firms can differentiate themselves from other firms by offering unique products or services. As a result, new firms can enter the market and offer their own unique products, making it fairly easy for them to enter the market. However, these firms may still face challenges in gaining market share and establishing their brand in a market that is already crowded with competitors.

Firms May Easily Enter a Monopolistically Competitive Market