Which of the following is true about monopolistic competition but false about perfect competition?
A) There are a large number of independently acting sellers.
B) There are no barriers to entry.
C) Firms can make an economic profit in the short run.
D) Firms compete on their product's price as well as its quality and marketing.
E) Firms cannot make an economic profit in the long run.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms differentiate their products through quality and marketing, unlike in perfect competition where products are homogeneous.

Which of the Following Is True About Monopolistic Competition but False