ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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oligopoly
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monopolistic competition
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monopoly
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None of the above
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Detailed explanation-1: -Under monopolistically competitive market, firms are free to enter the industry or leave the industry. However, new firms have no absolute freedom of entry in the industry. Products of some firms may be legally patented. New firms cannot produce those products.
Detailed explanation-2: -What Is Monopolistic Competition? Monopolistic competition exists when many companies offer competing products or services that are similar, but not perfect, substitutes. The barriers to entry in a monopolistic competitive industry are low, and the decisions of any one firm do not directly affect its competitors.
Detailed explanation-3: -Free entry and exit-Firms can freely enter a monopolistically competitive market when they find it profitable to do so, and they can exit when a monopolistically competitive market is no longer profitable.