chose the right answer More monopolistic competition Consider the following stat
ID: 1181567 • Letter: C
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chose the right answer
More monopolistic competition Consider the following statements: Consumers are always better off if a market is monopolistically competitive rather than perfectly competitive because of greater product variety. A monopolistically competitive firm sets price above marginal cost. A monopolistically competitive market has conditions that allow relatively free entry and exit. A monopolistically competitive market consists of firms selling goods that are distinct yet highly substitutable. Which of these statements is true?Explanation / Answer
Statements 1 (I) , 3 (III) and 4 (IV) are true.
In a monopolistic market, the companies are selling differentiated goods. These goods are essentially the same with minor differences. Thus it offers a wide variety to consumers. Thus these goods are highly substitutable too even though they're distinct.
Monopolistic market is a free market and the companies are free to enter and exit.
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