Monopolistic competition is characterized by (Select all correct answers) □ A. Easy entry and exit from the market B. Firms in the market are price takers C. Many sellers □ D. Differentiated products E. Price inelastic demand

Monopolistic competition is characterized by (Select all correct answers) □ A. Easy entry and exit from the market B. Firms in the market are price takers C. Many sellers □ D. Differentiated products E. Price inelastic demand

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Monopolistic competition is characterized by
(Select all correct answers)
OA. Easy entry and exit from the market
B. Firms in the market are price takers
C. Many sellers
D. Differentiated products
E. Price inelastic demand

Expert Solution

Step 1

There are different types of market structures on the basis of number of buyers and sellers, type of products, the pricing etc. Monopolistic competition combines features of both perfect competition and monopoly.

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