How does the presence of monopolistic competition influence product variety and innovation in a market? A. It decreases product variety and stifles innovation due to the lack of competition. B. It increases product variety and encourages innovation as firms seek to differentiate their products. C. It has no significant impact on product variety and innovation. D. It leads to standardization of products and processes, reducing product variety but increasing efficiency.
How does the presence of monopolistic competition influence product variety and innovation in a market? A. It decreases product variety and stifles innovation due to the lack of competition. B. It increases product variety and encourages innovation as firms seek to differentiate their products. C. It has no significant impact on product variety and innovation. D. It leads to standardization of products and processes, reducing product variety but increasing efficiency.
Chapter14: Monopolistic Competition And Product Differentiation
Section: Chapter Questions
Problem 10P
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Question
![How does the presence of monopolistic
competition influence product variety and
innovation in a market?
A. It decreases product variety and stifles
innovation due to the lack of competition.
B. It increases product variety and
encourages innovation as firms seek to
differentiate their products.
C. It has no significant impact on product
variety and innovation.
D. It leads to standardization of products and
processes, reducing product variety but
increasing efficiency.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0b96cf0d-7cc7-4cda-885f-3f882ddc9cf3%2Ff1d56775-2f8c-43d6-83cf-efbd5fdf173b%2Ffi1gwx_processed.png&w=3840&q=75)
Transcribed Image Text:How does the presence of monopolistic
competition influence product variety and
innovation in a market?
A. It decreases product variety and stifles
innovation due to the lack of competition.
B. It increases product variety and
encourages innovation as firms seek to
differentiate their products.
C. It has no significant impact on product
variety and innovation.
D. It leads to standardization of products and
processes, reducing product variety but
increasing efficiency.
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