What drawback does monopolistic competition have compared to a monopoly?
Understand the Problem
The question is asking about the differences between monopolistic competition and monopoly, specifically focusing on the drawbacks of monopolistic competition in comparison to a monopoly. The high-level approach to answering this would involve identifying the characteristics of both market structures and analyzing how these affect competition and market efficiency.
Answer
Monopolistic competition has more competitors.
Monopolistic competition has more competitors.
Answer for screen readers
Monopolistic competition has more competitors.
More Information
The presence of more competitors in monopolistic competition can dilute market power and lead to less profit per firm compared to a monopoly.
Sources
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