CPA-BUSINESS practice question 3 of 35
Entry into monopolistic competition is:
Full set: 530 questionsChoice "d" is correct. The characteristics of monopolistic competition include:
• Numerous firms with differentiated products.
• Ease of entry - few barriers.
• Firms exact some influence over price and market.
• Non-price competition is frequent and critical. Choice "a" is incorrect. Monopolistic competition has a few obstacles. A market with no obstacles is in perfect competition. Choice "b" is incorrect. Significant obstacles are characteristic of oligopoly. Choice "c" is incorrect. Significant capital requirements represent a significant barrier to entry, which is characteristic of oligopoly.
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