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10 May, 23:11

Because there are many firms in monopolistic competition markets, Select one:

a. everyone is a price taker.

b. producers do not have to consider the reactions of rival firms.

c. government often encourages consolidation to reduce the number of competitors.

d. price controls may be implemented.

e. the many competitors will focus on product differentiation.

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  1. 10 May, 23:17
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    e. the many competitors will focus on product differentiation.

    Explanation:

    A monopolistic market structure has elements of a perfectly competitive market and a monopoly. Like in perfect competition, there are many buyers and sellers in the markets. However, the products in monopolistic competition are differentiated. The products target the same customers and address similar needs, but are not identical.

    To gain competitive advantage, firms in a monopolistic competition differentiate by improving product and customer service quality. Firms will engage in advertisements and promotions to win customers. Restaurants and TV service providers are examples of firms in this market. Restaurants offer the same service but will have different and unique products to attract customers

    Other characteristics of monopolistic markets include,

    Many firms Freedom of entry and exit Firms are price makers because the products or services are highly differentiated
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