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Question
Macroeconomics
Posted 10 months ago
All of these options describe a characteristic of monopolistic competition EXCEPT which option?
Choose 1 answer:
(A) a downward-sloping demand curve
(B) no barriers to entry
(C) many sellers
(D) many buyers
(E) identical products
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Answer from Sia
Posted 10 months ago
Solution
a
Characteristics of Monopolistic Competition: Monopolistic competition is characterized by a downward-sloping demand curve, no barriers to entry, many sellers, and many buyers
b
Identifying Non-Characteristic: The options provided are typical characteristics of monopolistic competition except for one that is not typical of this market structure
c
Elimination of Options: Options (A), (B), (C), and (D) are all characteristics of monopolistic competition
d
Identifying the Exception: Monopolistic competition is known for products that are differentiated, not identical. This is what distinguishes it from perfect competition, where products are identical
Answer
(E) identical products
Key Concept
Product Differentiation in Monopolistic Competition
Explanation
Monopolistic competition is characterized by differentiated products, not identical products, which is a feature of perfect competition.
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