Entry into a market characterized by monopolistic competition
A)Is rare because firms have market power.
B)Is frequent because barriers to entry are low.
C)Occurs when a firm's demand is everywhere below its long-run average cost curve.
D)Results from economies of scale.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by low barriers to entry, meaning it is relatively easy for new firms to enter the market. Therefore, entry into this market is frequent.

Entry into a Market Characterized by Monopolistic Competition