What does monopolistic competition have in common with perfect competition?
A) Product differentiation.
B) A large number of firms and freedom of entry and exit.
C) A standardised product.
D) Barriers to exit but no barriers to entry.
E) The ability to make an economic profit in the long run.

Question

Quizplus · Accepted Answer

Monopolistic competition and perfect competition both feature a large number of firms and freedom of entry and exit, allowing firms to enter or leave the market with relative ease. This is a key similarity between the two market structures.

What Does Monopolistic Competition Have in Common with Perfect Competition