Question

A firm operating under monopolistic competition is able to make a choice between _________.

• A. Product differentiation
• B. selling costs
• C. Product quality
• D. All of the above

Answer 1

Answer: (D)

All of the above

Monopolistic competition is a market structure where there are large number of sellers selling differentiated products. There is also no entry barriers on the firm. Hence, to earn profit, a firm operating under monopolistic competition is able to make choices between product differentiation, selling costs and product quality.