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Question $45$ of $50$

Though its name can sometimes cause confusion for students, the market structure we call "monopolistic competition" is so

a$.$ In what ways is a monopolistically competitive market like a monopoly?

Firms can produce additional output at zero marginal cost.

Firms compete "for the market" rather than $"$in the market".

Firms sell differentiated products, resulting in a downward$-$sloping demand curve.

There exist significant barriers to entry in such a market.

In what ways is a monopolistically competitive market like competition?

Firms all sell their goods at a single market$-$clearing price.

Firms compete "for the market" rather than $"$in the market".

Firms can only compete on price; they cannot compete on product differentiation.

There exist many firms in the market, and more firms can enter easily.