An important characteristic of monopolistic competition is that
A) a kinked demand curve faces all firms.
B) few firms exist.
C) each firm has total control over price.
D) each firm seeks a differential advantage through any marketing factor.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms seek to differentiate their products or services from those of competitors in various ways, such as through branding, quality, or design, to gain a competitive edge and attract customers. This is not about total price control or the presence of a kinked demand curve, which is more associated with oligopoly, nor is it about the market having few firms, which contradicts the idea of monopolistic competition where many firms compete.

An Important Characteristic of Monopolistic Competition Is That