A characteristic of a monopolistically competitive market is that

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In a monopolistically competitive market, each firm faces a downward-sloping demand curve because they are selling differentiated products. This makes it easier for consumers to switch from one firm's product to another's. A and B are incorrect because firms in this type of market do engage in non-price competition, but they also compete on price. Each firm's marginal revenue curve lies below its demand curve because they must lower their price to sell more of their product. D is incorrect because firms in this market sell differentiated products, not identical ones. E is incorrect because entry into this type of market is relatively easy compared to a monopoly.

A Characteristic of a Monopolistically Competitive Market Is That