Which of the following is a characteristic of monopolistic competition? rev: 05_15_2018 Multiple Choice relatively easy entry a relatively small number of firms standardized product absence of nonprice competition

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Business

Gerald Leonard

11 July, 01:24

Which of the following is a characteristic of monopolistic competition? rev: 05_15_2018 Multiple Choice relatively easy entry a relatively small number of firms standardized product absence of nonprice competition

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Answers (1)

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Harrison Black · Answer 1

The correct answer is relatively easy entry.

Explanation:

Monopolistic competition is a market structure in which there are a large number of firms, the entry into the market is relatively easier than monopoly. These firms produce differentiated products which are close substitutes.

The firm is a price maker and faces a downward-sloping demand curve. Unlike oligopoly decision of a firm does not affect its competitors. Though these firms do not show productive or allocative efficiency. They have excess capacity in the long run.