Which of the following is not a feature of monopolistic competition?

Free entry and free exit

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Non- Homogeneous products

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Large number of firms

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Restrictions on entry

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Solution

The correct option is C Restrictions on entry
Monopolistic competition is a competition where there are a large number of sellers who sell related products which are close substitutes for each other. Also, there are no barriers to entry. Hence, there are no restrictions on entry in the monopolistic competition.

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Explain 'freedom of entry and exit of firms in industry' feature of monopolistic competition.

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