Monopolistic competition is a market in which there are __________ firms that sell ___________ products,and there are ______ barriers to entry.
A) many;differentiated;no
B) many;homogeneous;many
C) few;differentiated;no
D) few;homogeneous;many
E) many;differentiated;many

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by many firms that sell differentiated products, meaning that they are similar but not identical. There are no significant barriers to entry, which means that new firms can enter the market relatively easily. Option B is incorrect because monopolistic competition involves differentiated products, not homogeneous products. Option C and D are incorrect because monopolistic competition involves many firms, not few firms. Option E is incorrect because while there are many firms selling differentiated products in monopolistic competition, there are no significant barriers to entry, so the correct answer is A.

Monopolistic Competition Is a Market in Which There Are __________