A feature of monopolistic competition that makes it different from monopoly is the:
A) fact that firms in the model of monopolistic competition follow the marginal decision rule while monopolies do not.
B) downward-sloping demand curve.
C) downward-sloping marginal revenue curve.
D) number of firms in the industry.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by a large number of firms in the industry, each producing a slightly differentiated product. This means no single firm has a significant market share or control over prices, unlike a monopoly. The other options (A, B, and C) are features common to both monopolistic competition and monopoly.

A Feature of Monopolistic Competition That Makes It Different from Monopoly