76) A major difference between monopolistic competition and perfect competi¬tion

Question

76) A major difference between monopolistic competition and perfect competi¬tion is that
a. there are barriers to entry in monopolistic competition. There are no barriers to entry in perfectly competitive markets.
b. monopolistically competitive firms sell differentiated products. Perfectly competitive firms sell identical products.
c. government regulation restricts the ability of monopolistically competitive firms to change their prices. Perfectly competitive firms face no price regula¬tion.
d. the market demand curve in a monopolistically competitive market slopes downward. The market demand curve in a perfectly competitive market is horizontal.

Explanation / Answer

b. monopolistically competitive firms sell differentiated products. Perfectly competitive firms sell identical products.

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