Which of the following is a characteristic of a monopolistically competitive market? I. Each firm is a price-taker.
II) Firms sell slightly differentiated products.
III) Each firm faces a downward-sloping demand curve.

Question

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In a monopolistically competitive market, firms sell slightly differentiated products which means they have some degree of pricing power and can differentiate themselves from their competitors. Each firm also faces a downward-sloping demand curve as they are not the only seller of their particular type of product. However, firms are not price-takers as there is some variation in their pricing strategies due to the differentiation of their products.

Which of the Following Is a Characteristic of a Monopolistically