To maximise their profits and defend those profits from competitors, monopolistically competitive firms must
A)lobby government to erect barriers to entry in their industries.
B)limit foreign competition in their markets by encouraging the government to impose tariffs and other trade restrictions.
C)differentiate their products.
D)achieve economies of scale.

Question

Quizplus · Accepted Answer

Monopolistically competitive firms differentiate their products to make them stand out from their competitors' products, thereby creating a perceived uniqueness and brand loyalty among consumers. This allows the firm to charge a price premium, which increases their profits.

To Maximise Their Profits and Defend Those Profits from Competitors