A monopolistically competitive firm has some degree of market power because

Question

Quizplus · Accepted Answer

A monopolistically competitive firm has some degree of market power because it sells a differentiated product. This means that the firm's product is distinguishable from other firms' products, allowing it to have some pricing power and control over the market. However, it does not necessarily mean that the firm always makes positive profits, since there may still be competitive pressures that limit its ability to raise prices. The other answer choices are not necessarily true for all monopolistically competitive firms.

A Monopolistically Competitive Firm Has Some Degree of Market Power