A market is called monopolistically competitive if each firm has the same product but consumers can choose to purchase the product from any firm.

Question

Quizplus · Accepted Answer

In monopolistically competitive markets, firms differentiate their products in some way, so they are not exactly the same. This allows consumers to have some choices in terms of brand, quality, or other factors. However, while the products may be slightly different, they are close substitutes, so firms still compete for customers.

A Market Is Called Monopolistically Competitive If Each Firm Has