A characteristic of monopolistic competition that is not present in any other market structure is that there
A)is only one seller and that seller holds a high level of market power.
B)are many sellers and each produces its own version of the product.
C)are a small number of sellers who have market power.
D)are many sellers that produce identical products.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by many sellers producing slightly differentiated products. This means that each seller has some control over the price of its product as it is not identical to competing products, but there are still many substitutes available in the market. This feature is not present in any other market structure, such as perfect competition where there are many sellers producing identical products, or monopoly where there is only one seller with a high level of market power.

A Characteristic of Monopolistic Competition That Is Not Present in Any