A Monopolistically Competitive Firm Differs from a Perfectly Competitive Firm

question 58

Multiple Choice

A monopolistically competitive firm differs from a perfectly competitive firm in that a monopolistically competitive firm:

• A) faces a downward-sloping demand curve for its product.
• B) faces a horizontal demand curve at the market-clearing price.
• C) is able to earn profits in the long run.
• D) faces virtually no barriers to entry.

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