Which of the following is not true of monopolistic competition?
A)There are a large number of buyers and sellers.
B)The firms produce differentiated products.
C)There exists free entry and exit of firms.
D)Each of the firms faces a horizontal demand curve.
E)Each of the firms act as a minimonopoly in the market.

Question

Quizplus · Accepted Answer

Each firm in monopolistic competition faces a downward-sloping demand curve, which means that they cannot sell any quantity they want at the market price, unlike perfect competition where all firms face a horizontal demand curve.

Which of the Following Is Not True of Monopolistic Competition