In the short run,product differentiation enables firms in monopolistically competitive markets to:
A) act like a monopolist.
B) sell a standardized good.
C) collude with competing firms to set prices.
D) act like perfectly competitive firms.

Question

Quizplus · Accepted Answer

Product differentiation allows firms to create a perceived uniqueness of their products, which gives them the ability to act like a monopolist to some extent. They can charge a higher price for their unique product without losing all of their customers to close substitutes.

In the Short Run,product Differentiation Enables Firms in Monopolistically Competitive