What is monopolistic competition?

Question

Quizplus · Accepted Answer

Monopolistic competition is a market structure in which there are many firms selling products that are differentiated from each other (such as through branding, packaging, or other features), but are still close substitutes. This means that there is not just one seller, but there may be a few sellers with some market power over their own product. Option A is incorrect as it describes a pure monopoly. Option B is incorrect as it describes a monopoly rather than monopolistic competition. Option C is incorrect as it is contradictory; a monopolist would not begin to act competitively as they would already be the sole seller in the market with complete market power.

What Is Monopolistic Competition