QUESTION IMAGE
Question
- in a monopolistic competitive market, what creates the \monopolistic\ aspect?
complete control over market prices
limited number of sellers
government regulations
product differentiation
In a monopolistic - competitive market, firms have some market power due to product differentiation. Firms can set prices to some extent as their products are not perfect substitutes. Complete control over market prices is in monopoly. A limited number of sellers is a feature of oligopoly. Government regulations don't create the monopolistic aspect here. Product differentiation gives firms a degree of monopoly - like power.
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Product differentiation