Asked by Yussef Farag on Jun 03, 2024
Verified
Monopolistic competition describes an industry characterized by:
A) a product with many close substitutes.
B) a horizontal demand curve.
C) a small number of firms.
D) barriers to entry and exit.
Monopolistic Competition
A market structure characterized by many firms offering products that are similar but not identical, allowing for some degree of market power and product differentiation.
Close Substitutes
Goods or services that can easily replace one another in consumption due to their similar characteristics.
Horizontal Demand
Refers to a demand curve that is completely elastic, indicating that consumers are willing to purchase any quantity of the product at a specific price.
- Understand the characteristics and outcomes of monopolistic competition.
Verified Answer
Learning Objectives
- Understand the characteristics and outcomes of monopolistic competition.
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