Product differentiation and a certain degree of monopoly power are characteristics of:
A)perfectly competitive firms.
B)monopolistically competitive firms.
C)monopoly markets.
D)monopsony markets.

Question

Quizplus · Accepted Answer

Product differentiation allows firms in monopolistically competitive markets to have some control over price, and they have a certain degree of monopoly power but not as much as firms in pure monopoly markets. Therefore, monopolistically competitive firms are characterized by these two features.

Product Differentiation and a Certain Degree of Monopoly Power Are