Asked by Ja'Nayla Watts on May 30, 2024
Verified
Competition limits the price a monopolistically competitive firm can set.
Monopolistically Competitive
A market structure where many firms sell products that are similar but not identical, allowing for significant differentiation and competition.
- Understand the concept and characteristics of monopolistic competition.
Verified Answer
BG
Benjamin GablerJun 01, 2024
Final Answer :
True
Explanation :
In a monopolistically competitive market, there are many firms producing similar but differentiated products. Consumers have a range of choices, so if one firm raises its prices too high, consumers will switch to a similar product from a different firm. This competition among firms limits the price that any one firm can set.
Learning Objectives
- Understand the concept and characteristics of monopolistic competition.