A characteristic of monopolistic competition is:
A) that there are substantial barriers to entry.
B) that they produce a differentiated product.
C) that there are few firms in the industry.
D) that they face a perfectly elastic demand curve.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by firms producing differentiated products, meaning that there are differences in the products or services offered even within the same industry. This allows firms to have some degree of market power or control over the price, without facing a perfectly elastic demand curve. However, there are typically low barriers to entry, meaning that new firms can easily enter the market and compete, preventing any one firm from having complete control over the industry.

A Characteristic of Monopolistic Competition Is