Question

Monopolistic competition differs from perfect competition primarily because:

• A. In monopolistic competition, there are relatively few barriers to entry
• B. In monopolistic competition, entry into the industry is blocked.
• C. In perfect competition, firms can differentiate their products.
• D. In monopolistic competition, firms can differentiate their products.

Answer 1

The correct option is D In monopolistic competition, firms can differentiate their products.

In monopolistic competition, firm can differentiate their products where in perfect competition the firms sell homogeneous products.