A significant difference between perfect competition and monopolistic competition is that
A)a perfectly competitive firm is a price searcher, while a monopolistic competitive firm is a price taker.
B)a perfectly competitive firm faces a downward-sloping demand curve, while a monopolistic competitive firm faces a perfectly elastic demand curve.
C)a perfectly competitive firm sells a homogeneous product, while a monopolistic competitive firm sells a differentiated product.
D)a perfectly competitive firm sets price above marginal cost, while a monopolistic competitive firm sets price equal to marginal cost.

Question

Quizplus · Accepted Answer

In perfect competition, firms sell identical (homogeneous) products, whereas in monopolistic competition, firms sell differentiated products, which is a key distinction between the two market structures.

A Significant Difference Between Perfect Competition and Monopolistic Competition Is