Monopolistic competition exists when:
A) each competitor has its own kinked demand curve.
B) there is only one firm in the industry.
C) no substitute products are available for consumers in this market.
D) each firm in the market has differentiated its product from its competitors--in the eyes of some customers.
E) None of these alternatives is correct.

Question

Quizplus · Accepted Answer

Monopolistic competition is a market situation that develops when each firm in the market has different (heterogeneous) products in the eyes of some customers.

Monopolistic Competition Exists When