How does monopolistic competition differ from perfect competition?
A) There are more sellers in a market characterized by monopolistic competition.
B) It is easier for sellers to enter a market/industry characterized by monopolistic competition.
C) In a perfectly competitive market, it is easier to make a profit.
D) In a market characterized by monopolistic competition, individual firms have more control over price.
E) In monopolistic competition, small producers have a harder time making a profit.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms have some degree of market power which allows them to influence the prices of their products, unlike in perfect competition where firms are price takers due to the homogeneous nature of the products and the presence of many sellers.

How Does Monopolistic Competition Differ from Perfect Competition