The key difference(s) between perfect competition and monopolistic competition is:
A) that a monopolistically competitive firm is a price taker, whereas a perfectly competitive firm is a price maker.
B) that a monopolistically competitive firm is a price maker, the same as a perfectly competitive firm is a price maker.
C) that a monopolistically competitive firm can raise its price and still retain some
Customers.
D) that if a monopolistically competitive firm raises its price it will lose all customers.

Question

Quizplus · Accepted Answer

The key difference between perfect competition and monopolistic competition is that in monopolistically competitive markets, firms have some market power and can differentiate their products to some extent, allowing them to raise their prices and still retain some customers. In perfect competition, all firms are price takers and cannot influence the market price. Therefore, options A, B, and D are incorrect.

The Key Difference(s) Between Perfect Competition and Monopolistic Competition Is