Which of the following is the most distinguishing characteristic of a monopolistically competitive industry?
A)Market barriers
B)One firm controls the industry
C)Product differentiation
D)A small number of firms dominate the market

Question

​Which of the following is the most distinguishing characteristic of a monopolistically competitive industry?
A)​Market barriers
B)​One firm controls the industry
C)​Product differentiation
D)​A small number of firms dominate the market

Quizplus · Accepted Answer

The most distinguishing characteristic of a monopolistically competitive industry is that firms produce differentiated products that are not perfect substitutes for each other. This product differentiation allows for firms to have some degree of market power and control over their pricing. The other options (A, B, and D) are characteristics of other market structures such as barriers to entry for monopolies, a single firm in a monopoly, and a small number of dominant firms in an oligopoly.

​Which of the Following Is the Most Distinguishing Characteristic of a Monopolistically

Which of the Following Is the Most Distinguishing Characteristic of a Monopolistically