An industry composed of 40 firms,none of which has more than 3 percent of the total market for a differentiated product,can best be described as:
A)monopolistic competition
B)a monopoly
C)an oligopoly
D)perfect competition
E)competitive monopoly

Question

Quizplus · Accepted Answer

The industry described fits the characteristics of monopolistic competition. There are multiple firms selling differentiated products, and no single firm has a dominant market share. This results in competition between firms based on product differentiation and non-price factors, which is a hallmark of monopolistic competition.

An Industry Composed of 40 Firms,none of Which Has More