A monopolistically competitive industry is similar to a perfectly competitive industry in that:
A)there is free entry and exit in both markets.
B)products are differentiated in both markets.
C)firms in both markets decide output and prices on the basis of strategic interaction.
D)the demand curves in both markets are downward-sloping.

Question

Quizplus · Accepted Answer

Both monopolistically competitive and perfectly competitive industries have free entry and exit, allowing firms to enter or leave the market easily.

A Monopolistically Competitive Industry Is Similar to a Perfectly Competitive