Monopolistic competition is different from perfect competition in that every manufacturer
A)has a small monopoly, and differentiates the product.
B)takes the product quality as given, and chooses price.
C)takes output level as given, but must choose price.
D)differentiates product, but cannot advertise successfully.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by a large number of firms in the market, but each firm has some market power due to differentiated products. This means that each firm has a small monopoly on its specific product, allowing them to differentiate their products and potentially charge higher prices. In contrast, in perfect competition, products are homogeneous, and firms must take the market price as given and cannot differentiate their products.

Monopolistic Competition Is Different from Perfect Competition in That Every