The main difference between perfect competition and monopolistic competition is
A)the number of sellers in the market.
B)the ease of exit from the market.
C)the difference in the firm's profits in the long run.
D)the degree of product differentiation.

Question

Quizplus · Accepted Answer

The main difference between perfect competition and monopolistic competition is the degree of product differentiation. In perfect competition, all firms offer the same product, while in monopolistic competition, firms offer differentiated products, which allows them some control over the price. The number of sellers in the market and ease of exit can vary in both types of competition, and both types of firms can earn zero economic profit in the long run.

The Main Difference Between Perfect Competition and Monopolistic Competition Is