Question

A monopolistically competitive firm Group of answer choices is always a retail establishment. faces a perfectly elastic demand curve for its product. tries to differentiate its product from competitors' products. has more monopoly power in the long run than does a perfectly competitive firm.

Answer 1

Tries to differentiate its product from competitors' products.

Step-by-step explanation:

Monopolistically competitive firms compete by product differentiation. In this market structure there are a lot firms that offer somewhat similar but differentiated products and thus are able to exercise some sort of price control. Since these companies produce products and services that are not perfect substitutes, monopolistically competitive firms are able to make economic profits in the short run and in the long run if they are able to differentiate right. In such a market structure, barriers to entry are often less as compared to traditional monopolies.

Hope that helps.