The key characteristics of a monopolistically competitive market structure include
A) few sellers.
B) sellers selling similar but differentiated products.
C) high barriers to entry.
D) sellers acting to maximise revenue.

Question

Quizplus · Accepted Answer

Monopolistically competitive markets involve many sellers offering similar but slightly differentiated products. This means consumers have some choice among products. Unlike in a pure monopoly market, entry barriers are low, allowing new firms to enter and compete with existing firms. Each firm may have some market power, but they are still price takers to some extent. Firms may also aim to maximise profits rather than simply revenue.

The Key Characteristics of a Monopolistically Competitive Market Structure Include