Question

Which of the following is not a characteristic of monopolistic competition? Firms are price takers. There are many buyers and sellers. Barriers to entry are low.

Answer 1

1) Companies are price takers. It is not a characteristic of monopolistic competition.

Explanation: In monopolistic competition, the products offered are characterized by differentiation and this differentiation gives companies market power, to be able to decide when setting their prices and not be price takers.