The monopolistic competition that is typical of the U.S. economy
A) always leads to higher prices, but it may not lead to higher consumer satisfaction.
B) is a problem because it does not result in products that reflect consumer's social values.
C) is the result of consumer preferences.
D) is the result of manipulation of markets by business firms.
E) All of the above are true.

Question

Quizplus · Accepted Answer

Monopolistic competition in the U.S. economy is the result of consumer preferences. Consumers in the U.S. value choice and differentiation in products, which leads to a market with multiple firms producing slightly different goods. While this may lead to higher prices and some consumers being unsatisfied with certain products, it is ultimately a result of consumer demand. Choices A, B, and D are not accurate statements about monopolistic competition in the U.S. economy.

The Monopolistic Competition That Is Typical of the U