Which of the following is a distinction between perfectly competitive and monopolistic competition?

Question

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The main distinction between perfectly competitive and monopolistically competitive markets is the shape of the demand curve faced by each. In a perfectly competitive market, firms face a perfectly elastic demand curve, meaning they must sell their product at the market price and cannot influence the price through their individual actions. In contrast, monopolistically competitive firms face a downward-sloping demand curve, meaning they have some market power to influence the price of their product. This allows them to raise their price to a certain extent without losing all their sales, but they still face competition from similar products. Choices A, B, and D are incorrect because they do not accurately describe the differences between the two market structures.

Which of the Following Is a Distinction Between Perfectly Competitive