In the term “monopolistic competition”, what does the word “competition” refer to?

1. A Option A: The products are differentiated in a monopolistically competitive market, just like in a competitive market
2. B Option B: Monopolistically competitive firms charge prices equal to the minimum of their average total cost, just like competitive firms
3. C Option C: There are many sellers in a monopolistically competitive market and there is free entry and exit, just like a competitive market
4. D Option D: Monopolistically competitive firms face a downward-sloping demand curve, just like competitive firms

Answer checked 11 October 2026 · How we write and check questions