Question

If one were to discuss why the term monopolistic competition is used, the best description would be that the industry is monopolistic because it

a. has high barriers to entry, but is competitive because it has many firms.

b. has low barriers to entry, but is competitive because it has few firms.

c. has product differentiation, but is competitive because it has many firms.

d. has a monopoly, but is competitive because there are low barriers to entry, meaning it has potential rivals.

e. holds patents, but is competitive because other firms might invent similar patentable products.

Answer

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