Monopolistic competition has the following characteristics:
A) one large buyer.
B) many firms and consumers with differentiated products.
C) a homogeneous product.
D) difficult entry and exit.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by many firms and consumers in the market with differentiated products. This means that each firm has some market power as its products offer some unique features or differentiation, but there are still many close substitutes in the market. The other options are not characteristics of monopolistic competition; it does not involve one large buyer or homogeneous products, and entry and exit are typically not difficult.

Monopolistic Competition Has the Following Characteristics