The key characteristics of a monopolistically competitive market structure include
A)many small (relative to the total market)sellers acting independently.
B)all sellers sell a homogeneous product.
C)barriers to entry are strong.
D)sellers have no incentive to advertise their products.

Question

Quizplus · Accepted Answer

The key characteristic of a monopolistically competitive market structure is that there are many small sellers, each producing a slightly differentiated product, and behaving independently. This means that there is no single dominant player in the market, and no strong barriers to entry. Advertising is often used by firms in this type of market to differentiate their product from competitors. Therefore, options B, C, and D are incorrect.

The Key Characteristics of a Monopolistically Competitive Market Structure Include