Monopolistic competition describes an industry characterized by a _____ number of firms producing _____ products with _____ entry.
A)small;identical;barriers to
B)small;similar;relatively easy
C)large;similar;relatively easy
D)large;identical;relatively easy

Question

Quizplus · Accepted Answer

Monopolistic competition is an industry with a large number of firms producing similar or differentiated products with relatively easy entry. Unlike perfect competition, firms in monopolistic competition have some control over the price they charge because their products are differentiated. However, there are no significant barriers to entry and exit, which means new firms can enter the market and existing firms can exit without much cost or difficulty.

Monopolistic Competition Describes an Industry Characterized by a _____ Number