Which of the following statements is false?
A)The monopolistic competitor is a price searcher.
B)The monopolistic competitor produces a product that differs slightly from the products of the other firms in the industry.
C)The monopolistic competitor faces a horizontal demand curve.
D)The monopolistic competitor produces an output at which price is greater than marginal cost.

Question

Quizplus · Accepted Answer

The monopolistic competitor does not face a horizontal demand curve; instead, they face a downward-sloping demand curve because they have some degree of market power due to product differentiation. A horizontal demand curve implies perfect competition, where firms are price takers.

Which of the Following Statements Is False