2332EconomicsMedium
The use of word “competition” in the name of the market structure called “monopolistic competition” refers to the fact that?
AMonopolistically competitive firms charge prices equal to the minimum of their average total cost just like competitive firms.
Bthere are many sellers in a monopolistically competitive market and there is free entry and exit in the market just like a competitive market
CMonopolistically competitive firms face a downward-sloping demand curve just like competitive firms.
DThe products are differentiated in a monopolistically competitive market just like in a competitive market.
Correct answer
B. there are many sellers in a monopolistically competitive market and there is free entry and exit in the market just like a competitive market
Explanation
The correct answer is there are many sellers in a monopolistically competitive market and there is free entry and exit in the market just like a competitive market.