Which of the following statements is NOT correct? A. Monopolistic competition is

Question

Which of the following statements is NOT correct?

A. Monopolistic competition is different from monopoly because monopolistic competition is characterized by free entry, whereas monopoly is characterized by barriers to entry.

B. Monopolistic competition is different from oligopoly because each seller in monopolistic competition is small relative to the market, whereas each seller can affect the actions of other sellers in an oligopoly.

C. Both monopolistic competition and perfect competition are characterized by product differentiation

D. Both monopolistic competition and oligopoly fall in between the more extreme market structures of competition and monopoly.

Explanation / Answer

C. Both monopolistic competition and perfect competition are characterized by product differentiation

is not correct, because perfect competition is market structure where all firms sell identical products.

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