Which of the following conditions distinguishes perfect competition from monopolistic competition?
A) the number of sellers
B) freedom of entry and exit
C) homogeneity of the product
D) none of the above

Question

Quizplus · Accepted Answer

Perfect competition assumes that all firms are selling a homogenous product, meaning that there is no differentiation between the products sold by different firms. Monopolistic competition, on the other hand, allows for differentiation in product offerings among firms, meaning that they are not selling a homogenous product. The number of sellers and freedom of entry and exit are characteristics shared by both perfect competition and monopolistic competition, so they do not distinguish one from the other.

Which of the Following Conditions Distinguishes Perfect Competition from Monopolistic