One factor that distinguishes a monopoly from monopolistic competition is that
A)firms in monopolistic competition practice collusion.
B)no barriers to entry exist in a monopoly.
C)barriers to exit exist in monopolistic competition.
D)close substitutes are available in monopolistic competition.
E)firms are price-takers in monopolistic competition.

Question

Quizplus · Accepted Answer

In monopolistic competition, there are many firms competing against each other selling similar but differentiated products. This means that there are close substitutes available to consumers. In contrast, monopolies exist when there is only one firm that dominates the market and has significant control over the supply and price of goods or services. There are often significant barriers to entry in these markets, making it difficult for new firms to enter and compete.

One Factor That Distinguishes a Monopoly from Monopolistic Competition Is