Which of the following describes the market situation in monopolistic competition?

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by a large number of small firms that sell differentiated products, meaning that each seller has some control over the price of their product as consumers perceive some differences between them. Therefore, sellers must differentiate their products from competitors to attract customers and gain market share. Option B describes a situation of perfect competition, where there are many identical products available. Option C is typical of a situation of monopoly, where there is only one producer dominating the market. Option D describes a situation of regulated monopoly, in which the government sets prices and limits the producer's power.

Which of the Following Describes the Market Situation in Monopolistic