Which of the following is a characteristic of a monopolistically competitive firm as opposed to a monopoly firm?
A) Monopolistically competitive firms make positive economic profit in the long-run unlike monopoly firms.
B) Monopolistically competitive firms face downward sloping demand curves unlike monopoly firms.
C) Monopolistically competitive firms do not face entry barriers unlike monopoly firms.
D) Monopolistically competitive firms produce goods that have no substitutes unlike monopoly firms.
E) Monopolistically competitive firms produce at the level where marginal revenue equals marginal cost unlike monopoly firms.
Correct Answer:
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