A feature of monopolistic competition that makes it different from monopoly is the:
A)fact that firms in monopolistically competitive industries follow the marginal decision rule,while monopolies do not.
B)downward-sloping demand curve.
C)downward-sloping marginal revenue curve.
D)number of firms in the industry.

Question

Quizplus · Accepted Answer

Monopolistic competition involves a large number of firms operating in a market with differentiated products, leading to a downward-sloping demand curve for each firm. However, unlike a monopoly, there are multiple firms in the industry, which means that no single firm has complete control over the market and pricing power. Therefore, the correct choice is option D.

A Feature of Monopolistic Competition That Makes It Different from Monopoly