One difference between monopolistic competition and pure competition is that
A) products may be homogeneous in monopolistic competition.
B) there is some control over price in monopolistic competition.
C) monopolistic competition has significant barriers to entry.
D) firms differentiate their products in pure competition.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms have some control over price due to their ability to differentiate their products. In pure competition, products are standardized and there is no control over price. Choice A is incorrect because in monopolistic competition, products are typically differentiated, although they may still be somewhat similar. Choice C is incorrect because monopolistic competition generally has low barriers to entry compared to other market structures such as monopoly or oligopoly. Choice D is incorrect because in pure competition, products are standardized and there is no differentiation.

One Difference Between Monopolistic Competition and Pure Competition Is That