Which of the following is not a characteristic of monopolistic competition?
A)Firms reacting to others' actions
B)Differentiated products
C)Many firms
D)Free entry and exit
E)Firms facing downward-sloping demand curves

Question

Quizplus · Accepted Answer

Firms reacting to others' actions is more characteristic of oligopoly, where a few firms dominate the market and each firm's actions can significantly affect the others. In monopolistic competition, while firms may be aware of their competitors, the market is characterized by many firms, differentiated products, free entry and exit, and each firm facing a downward-sloping demand curve, making individual actions less impactful on others.

Which of the Following Is Not a Characteristic of Monopolistic