Monopolistic competition is a market structure in which
A)firms produce and sell products for which there are no close substitutes.
B)the demand curve for a typical firm is horizontal.
C)firms cannot influence the market price.
D)barriers to entry are low.

Question

Quizplus · Accepted Answer

Monopolistic competition is a market structure in which there are a large number of small firms that produce differentiated products. This means that while the products are not identical, they still have close substitutes. Because of this, firms have some control over the price of their product and the demand curve is downward sloping. However, barriers to entry are low, allowing new firms to enter and compete in the market, leading to a degree of competition.

Monopolistic Competition Is a Market Structure in Which