Monopolistic competition means
A) a market situation where competition is based entirely on product differentiation and advertising.
B) a large number of firms producing a standardized or homogeneous product.
C) many firms producing differentiated products.
D) a few firms producing a standardized or homogeneous product.

Question

Quizplus · Accepted Answer

Monopolistic competition is a market structure in which there are many firms producing similar but not identical products, giving them some degree of market power. This is achieved through product differentiation, such as varying the quality, packaging, or design of their products, which allows firms to charge slightly different prices and attract a certain segment of customers. Therefore, option C - "many firms producing differentiated products" - is the best choice.

Monopolistic Competition Means