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Question
Microeconomics
Posted 9 months ago
All of these options describe a characteristic of monopolistic competition EXCEPT which option?
Choose 1 answer:
(A) many sellers
(B) a downward-sloping demand curve
(C) identical products
(D) many buyers
(E) no barriers to entry
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Answer from Sia
Posted 9 months ago
Solution
a
Definition of Monopolistic Competition: Monopolistic competition is a market structure characterized by many firms selling similar but not identical products
b
Characteristics of Monopolistic Competition: These include many sellers, product differentiation, and free entry and exit
c
Identifying the Exception: In monopolistic competition, products are differentiated, not identical
Answer
(C) identical products
Key Concept
Monopolistic competition involves product differentiation.
Explanation
In monopolistic competition, firms sell products that are similar but not identical, which differentiates them from perfect competition where products are identical.
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