If a firm is small, produces a differentiated good for which there are many close substitutes, and it is easy to enter and exit the industry, then the firm is a monopolistic competitor.

Question

Quizplus · Accepted Answer

This description matches the characteristics of monopolistic competition, where firms produce differentiated products, there are many competitors, and there are low barriers to entry and exit.

If a Firm Is Small, Produces a Differentiated Good for Which