True or False? Under monopolistic competition, we assume there are only a few number of firms. That is how they behave as monopolists in the short run.

Question

True or False?

Under monopolistic competition, we assume there are only a few number of firms. That is how they behave as monopolists in the short run.

a. True

b. False

Answer 1

This is a bit ambiguous. There are more than a few firms producing similar but not identical so that the have the ability to influence price somewhat but no to a great extent