The market structure called monopolistic competition is named using both monopoly and perfect competition.Why?
A)There are few firms in the market all producing the same product.
B)There is just one firm whose product can be easily differentiated.
C)There are a huge number of firms selling identical products at a constant price.
D)There are many firms with easy entry and exit but each firm sells a unique product.
E)Firms spend very little on advertising and promotion and thus are price takers.

Question

Quizplus · Accepted Answer

Monopolistic competition combines aspects of both monopoly and perfect competition. Like a monopoly, each firm in a monopolistically competitive market sells a unique product, giving them some degree of market power. However, like a perfectly competitive market, there are many firms and easy entry and exit.

The Market Structure Called Monopolistic Competition Is Named Using Both