A major distinction between a monopolistically competitive firm and an oligopolistic firm is that
A) one is a price taker and the other is a price maker.
B) a recognized interdependence exists between firms in one industry but not in the other.
C) one always produces differentiated products and the other always produces a homogeneous product.
D) one necessarily faces a downward-sloping demand curve and the other a horizontal demand curve.

Question

Quizplus · Accepted Answer

Monopolistically competitive firms typically operate independently and do not create a recognized interdependence between firms in their industry, while oligopolistic firms do. The other options do not necessarily differentiate between monopolistically competitive and oligopolistic firms.

A Major Distinction Between a Monopolistically Competitive Firm and an Oligopolistic