Which of the following is not common to perfect competition and monopolistic competition?
A) Free entry
B) Many sellers
C) Elimination of long run economic profits
D) Product differentiation

Question

Quizplus · Accepted Answer

Product differentiation is a feature of monopolistic competition, but not perfect competition. In perfect competition, all firms sell the same homogeneous product, while in monopolistic competition, firms differentiate their products to a certain extent to create a perceived difference in the eyes of consumers. Free entry, many sellers, and the elimination of long-run economic profits are common to both types of competition.

Which of the Following Is Not Common to Perfect Competition