Monopolistic competition has the following characteristics:
A)one large buyer.
B)many small sellers.
C)a homogeneous product.
D)difficult entry and exit.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by many small sellers who sell differentiated products that are not perfect substitutes for each other. This allows each seller to have some market power and control over their prices. There is also relatively easy entry and exit into the market, unlike in a monopoly or oligopoly where barriers to entry are high. The presence of many sellers, each with some degree of market power, leads to intense competition in the market.

Monopolistic Competition Has the Following Characteristics