The monopolistic competitor is a
A)price taker.
B)price searcher.
C)single seller of a good with no close substitutes.
D)firm that faces a horizontal demand curve.

Question

Quizplus · Accepted Answer

The monopolistic competitor is able to search for the price that will maximize its profit, rather than being a price taker like a perfectly competitive firm. However, it also faces some competition from other firms that have similar but not identical products, so it is not a single seller with no close substitutes. Finally, a monopolistic competitor typically faces a downward-sloping demand curve, not a horizontal one, so D is also incorrect.

The Monopolistic Competitor Is a