The model of monopolistic competition differs from the model of perfect competition in which of the following assumptions?
A)Free entry and exit
B)Product homogeneity
C)Large number of firms
D)Perfect information

Question

Quizplus · Accepted Answer

The assumption of product homogeneity is different between the two models. In perfect competition, all firms produce a homogeneous product, while in monopolistic competition, firms produce differentiated products. The other three assumptions (free entry and exit, large number of firms, perfect information) are common to both models.

The Model of Monopolistic Competition Differs from the Model of Perfect