Which of the Following Best Explains Why Firms in Monopolistic

question 116

Multiple Choice

Which of the following best explains why firms in monopolistic competition face a downward-sloping demand curve while perfectly competitive firms do not?

• A)Monopolistically competitive industries have only a few firms.
• B)Monopolistically competitive firms face barriers to entry.
• C)Only industries with free entry and exit have firms that face horizontal demand curves.
• D)Firms in monopolistic competition are price takers.
• E)Firms in monopolistic competition sell a differentiated good.

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