A monopolistically competitive firm is like an oligopolistic firm insofar as
A) both can earn an economic profit in the long run.
B) neither is protected by high barriers to entry.
C) both have MR curves that lie beneath their demand curves.
D) both face perfectly elastic demand.

Question

Quizplus · Accepted Answer

Both monopolistically competitive and oligopolistic firms have downward-sloping demand curves, which means their marginal revenue (MR) curves lie beneath their demand curves. This is because they have some degree of market power, allowing them to set prices above marginal cost.

A Monopolistically Competitive Firm Is Like an Oligopolistic Firm Insofar