Multiple Choice
Which of the following best explains why firms in monopolistic competition face a downward-sloping demand curve while perfectly competitive firms do not?
A) Monopolistically competitive industries have only a few firms.
B) Monopolistically competitive firms face barriers to entry.
C) Only industries with free entry and exit have firms that face horizontal demand curves.
D) Firms in monopolistic competition are price takers.
E) Firms in monopolistic competition sell differentiated goods.
Correct Answer:
Verified
Correct Answer:
Verified
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