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Question

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


A

Ease of entry into the industry.

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B

Product differentiation.

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C

A relatively large number of sellers.

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D

A homogeneous product.

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Solution

The correct option is D

A homogeneous product.


Answer d) A homogeneous product.

Monopolistic competition portrays an industry wherein many firms offer services and products that are comparable (however noticeably flawed) substitutes. Barriers to exit and entry in a monopolistic cutthroat industry are low, and the choices of any one firm don’t straightforwardly influence those of its rivals.


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