One of the Reasons for Low Cross-Price Elasticity in Monopolistic

question 124

Multiple Choice

One of the reasons for low cross-price elasticity in monopolistic competition and high cross-price elasticity in perfect competition is that

• A)Firms in perfect competition differentiate their products.
• B)In monopolistic competition consumers loyal to particular brands view other available products as poor substitutes.
• C)Consumers do not have perfect substitutes in perfect competition.
• D)To save money,firms in monopolistic competition do not advertise.

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