Which of the following characterizes monopolistic competition?
A)Many interdependent firms sell a homogeneous product.
B)A few firms produce a particular type of product.
C)Many firms produce a particular type of product,but each maintains some independent control over its own price.
D)A few firms produce all of the market supply of a good.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by many firms producing a particular type of product, but each maintaining some independent control over its own price. However, the products are not homogeneous, as they may have slight differences in quality or features. This leads to some degree of monopoly power for each firm, as they have differentiated their product from the competitors'.

Which of the Following Characterizes Monopolistic Competition