The Main Difference Between Perfect Competition and Monopolistic Competition Is

question 24

Multiple Choice

The main difference between perfect competition and monopolistic competition is:

• A) The number of sellers in the market
• B) The ease of entry and exit in the industry
• C) The degree of information about market price
• D) The degree of product differentiation
• E) Whether it is the short run or the long run

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Definitions:

Long Run

A period in which all factors of production and costs are variable, allowing for full adjustment to change.

Product Differentiation

The method of differentiating a product or service from its competitors to enhance its appeal to a specific target audience.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, leading to competition based on factors other than price.

Over-Differentiation

refers to the creation of product variations that exceed customer needs or desires, potentially leading to confusion and reduced sales.