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What is the Model of Monopolistic Competition (i.e Imperfect competition) characterized by?



A. Homogeneous goods
B. Differentiated goods
C. Substitute Goods
D. All of the above

This question is part of Microeconomics Practice Test
Asked by Muhammadakram, Last updated: Apr 07, 2020

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3 Answers

prakash subedi

Prakash subedi

Answered Apr 26, 2018

In monopolistic competition closely substitute goods are produced which are slightly differentiated. hence the more likely option should be C not the B.

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jarem

Jarem

Answered Jun 28, 2018

ALL OF THE ABOVE

In monopolistic competition closely substitute goods are produced which are slightly differentiatedbut let us note thata homogeneous productis one that cannot be distinguished from competingproductsfrom different suppliers.also said a homogenous product is one that is slightly diffrentiated from other similar products In other words, theproducthas essentially the same physical characteristics and quality as similarproductsfrom other suppliers. Oneproductcan easily be substituted for the other.

 

John Smith

John Smith

Answered Sep 15, 2016

Differentiated goods

In monopolistic goods are differentiated and the firm faces downward sloping demand curve i.e with every increase(decrease) in price there is decrease(increase) in quantity.
1
 

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