An important characteristic of monopolistic competition is that
A) startup costs are relatively low.
B) major firms have significant patent protection.
C) barriers to entry exist which reduce competition.
D) most firms sell identical products.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by relatively low startup costs, which allows more firms to enter the market. This contrasts with other market structures where high startup costs, patents, significant barriers to entry, or the sale of identical products by most firms might limit competition.

An Important Characteristic of Monopolistic Competition Is That