Question

The word "competition" in the label "monopolistic competition" refers to the fact that: a. firms vie against each other to get customers to buy their version of the product. b. firms have no control over the price they charge. c. there are very few firms producing in the market. d. none of the above

Answer 1

Answer:

A.

Explanation:

Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes. ... Unlike perfect competition, the firm maintains spare capacity.