Monopolistic competition describes an industry characterized by which of the following?
A)a product with many close substitutes
B)a horizontal demand curve
C)a small number of firms .D.barriers to entry and exit

Question

Quizplus · Accepted Answer

Monopolistic competition is an industry where there are many firms selling differentiated products that are close substitutes to each other. This means that consumers have a range of similar options to choose from, creating competition between the firms. The demand curve for each firm is downward sloping but not perfectly elastic, as consumers still have a preference for certain features or qualities of the product. There are no significant barriers to entry or exit in a monopolistically competitive industry.

Monopolistic Competition Describes an Industry Characterized by Which of the Following