Monopolistically competitive markets and perfectly competitive markets share some similarities but differ in a number of ways. One such difference between the two is that monopolistically competitive firms _____.(1 point)

Question

Responses

face some barriers to entry
face some barriers to entry

feature differentiated products
feature differentiated products

face no barriers to entry
face no barriers to entry

feature homogeneous products

Answer 1

The correct response is:

feature differentiated products

In monopolistically competitive markets, firms sell products that are similar but not identical, allowing them to have some degree of market power. In contrast, perfectly competitive firms sell homogeneous products.