In a monopolistically competitive market, sellers sell a differentiated product because:
A) there is a very low cross-price elasticity of demand between the products.
B) there is a valuable difference between sellers' products.
C) sellers' products are not close substitutes.
D) sellers cannot influence the market price.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, sellers sell a differentiated product because there is a valuable difference between sellers' products. This differentiation allows sellers to charge a higher price for their products than they could if they were selling an identical product.

In a Monopolistically Competitive Market, Sellers Sell a Differentiated Product