Which of the following is a characteristic of a monopolistically competitive market? I. There are many sellers.
II) Firms sell slightly differentiated products.
III) The demand curve facing each individual firm is horizontal.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, there are indeed many sellers (I) and firms sell slightly differentiated products (II), which allows them some degree of market power. The demand curve facing each firm is not horizontal but rather downward sloping, indicating that they can influence the price of their product to some extent, contrary to (III).

Which of the Following Is a Characteristic of a Monopolistically