Monopolistic competition is a market structure:
A) with many competitors selling differentiated products.
B) with only a handful of competitors selling similar products.
C) with many competitors selling virtually identical products.
D) with just a single producer completely dominating the industry.

Question

Quizplus · Accepted Answer

Monopolistic competition is a market structure in which there are many competitors selling differentiated products. Each firm has some control over the price they charge for their product because it is unique in some way from its competitors. This differentiation leads to firms having some degree of market power, but there are still enough competitors in the market to prevent any one firm from having complete control or monopoly power.

Monopolistic Competition Is a Market Structure