In the short run, a firm in a monopolistically competitive market operates much like a
A)firm in a perfectly competitive market.
B)firm in an oligopoly.
C)monopolist.
D)nonprofit firm.

Question

Quizplus · Accepted Answer

In the short run, a firm in a monopolistically competitive market has some degree of market power and can set its prices above marginal cost, similar to a monopolist. Unlike perfectly competitive firms, they do not take prices as given and can differentiate their products.

In the Short Run, a Firm in a Monopolistically Competitive