Companies that find themselves in a monopolistic competitive situation would be known to have:
A)no close substitutes.
B)no influence on price or supply.
C)few sellers.
D)differentiated its products because of lots of potential competitors.
E)a large number of sellers.

Question

Quizplus · Accepted Answer

In monopolistic competition, companies differentiate their products in order to stand out from their potential competitors. This is because there are many sellers in the market, but they all offer slightly different products, creating a situation where each company has some control over its own price and supply. Therefore, option D, "differentiated its products because of lots of potential competitors," is the best choice.

Companies That Find Themselves in a Monopolistic Competitive Situation Would