Monopolistically competitive firms have a "monopoly" element to them because
A)There is only one seller.
B)There are high barriers to entry.
C)Brand loyalty gives them a captive audience.
D)The cross-price elasticity is very high.

Question

Quizplus · Accepted Answer

Monopolistically competitive firms have differentiated products, which can lead to brand loyalty from consumers. This gives them a certain degree of market power, similar to a monopoly, but there are still many competitors in the market. However, this does not mean that there is only one seller, high barriers to entry, or a high cross-price elasticity.

Monopolistically Competitive Firms Have a "Monopoly" Element to Them Because