Monopolistic competition is characterized by which of the following attributes:
i.Many sellers
ii.Product differentiation
iii.Significant barriers to entry
A) (i) and (iii) only
B) (i) and (ii) only
C) (ii) and (iii) only
D) (i), (ii), and (iii)

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by many sellers and product differentiation, but not significant barriers to entry. In fact, there are relatively low barriers to entry, which makes it easier for new firms to enter the market and compete with existing ones. Option B includes both correct characteristics.

Monopolistic Competition Is Characterized by Which of the Following Attributes