Two different markets each have many buyers and many sellers, none of which have market power. Which of these would be MOST helpful in determining whether each market is monopolistically competitive or perfectly competitive?
A) information on the barriers to entry in each market
B) information on the level of information available to buyers and sellers
C) information on the degree of product differentiation in each market
D) information on the size of each industry

Question

Quizplus · Accepted Answer

Product differentiation is the key characteristic that distinguishes monopolistic competition from perfect competition, where products are identical.

Two Different Markets Each Have Many Buyers and Many Sellers