The wedding dress industry is monopolistically competitive.As a result, which of the following conditions applies to this industry?

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by a large number of firms that sell similar but not identical products. In the wedding dress industry, there are many dress suppliers, but their dresses tend to be differentiated in terms of design, quality, and price. Therefore, option B is the correct answer. Option A is incorrect because there is no identical product in this industry. Option C is incorrect because there is no obstacle to exit the industry if the supplier earns losses. Option D is incorrect because prices tend to be higher than if the industry approximated perfect competition due to product differentiation.

The Wedding Dress Industry Is Monopolistically Competitive