One of the characteristics of monopolistic competition is that
- there is mobility of factors of production
-
no single seller dominates the market
- the firms are price-takers
- consumers have perfect knowledge of price
The correct answer is: B
Explanation
Monopolistic competition is an industry in which many firms offer products or services that are similar, but not perfect substitutes. Barriers to entry and exit in a monopolistic competitive industry are low, and the decisions of any one firm do not directly affect those of its competitors.
The following are Characteristics of monopolistic competition
- Product differentiation.
- Many firms.
- Freedom of Entry and Exit.
- No single seller dominates the market
- Independent decision making.
- Some degree of market power.
- Buyers and sellers do not have perfect information (Imperfect Information)