Which of the following most characterizes monopolistic competition?
A)Price leadership.
B)Product differentiation.
C)Price discrimination.
D)Economies of scale.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by product differentiation, which means that firms try to distinguish their products from their competitors' products by adding unique features or marketing their products differently. This allows them to charge slightly higher prices than their competitors, but not enough to eliminate competition entirely. Price leadership is more common in oligopolistic markets where a few firms dominate the industry. Price discrimination is a pricing strategy employed by monopolies, while economies of scale refer to the cost advantages obtained by producing on a larger scale.

Which of the Following Most Characterizes Monopolistic Competition