For a monopolistically competitive market, the number of firms in the market implies that

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, each firm differentiates its product from those of its competitors and thus has some degree of market power, allowing it to act independently. Unlike in perfect competition, where firms face a perfectly elastic demand, or in a monopoly or oligopoly, where firms may collude, monopolistic competition is characterized by many firms acting independently without collusion.

For a Monopolistically Competitive Market, the Number of Firms in the Market