In a given market, a large number of firms sell a similar product. Consumers think that each firm's product is somewhat different from that of its competitors. This market is
A) perfectly competitive.
B) monopolistically competitive.
C) equivalent to a monopoly because consumers think the products are different.
D) equivalent to an oligopoly because consumers think the products are different.

Question

Quizplus · Accepted Answer

This market is monopolistically competitive because there are many firms selling similar but not identical products, and consumers perceive differences among them.

In a Given Market, a Large Number of Firms Sell