Monopolistic competition describes an industry characterized by:
A)a product with no close substitutes.
B)many firms,each with some market power.
C)a small number of firms.
D)barriers to entry and exit.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by a large number of firms, each with some degree of market power, but with differentiated products that are close substitutes for each other. This means there are barriers to entry, but not as high as those in a monopoly or oligopoly market. Therefore, options A and D are not correct, and option C does not accurately describe the industry.

Monopolistic Competition Describes an Industry Characterized By