Question

The key characteristics of a monopolistically competitive market structure include Select one: A. many small (relative to the total market) sellers acting independently. B. all sellers sell a homogeneous product. C. sellers have no incentive to advertise their products. D. barriers to entry are strong.

Answer 1

The correct answer is letter "A": many small (relative to the total market) sellers acting independently.

Step-by-step explanation:

Monopolistic Competition occurs in markets that have several competitors that sell identical goods or services but act independently. Restaurants, supermarkets, and clothing stores, for instance. In monopolistic competition, those similar products and services are not perfect substitutes from one another. The barriers to entry and exit in these industries are low and the decisions taken by one firm directly do not affect its rivals.