5 Questions
What allows firms in monopolistic competition to have some control over the price of their product?
Product differentiation
What is a key characteristic of firms in perfect competition?
They are price takers
What limits the market power of firms in monopolistic competition?
Presence of close substitutes
In which type of competition do firms engage in non-price competition such as advertising and product differentiation?
Monopolistic competition
What is a distinguishing feature of perfect competition compared to monopolistic competition?
Firms sell identical products
Test your understanding of monopolistic competition and perfect competition with this quiz. Explore the differences in product differentiation, price control, and market structure between the two types of competition.
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