The following statements regard product differentiation in monopolistic competition. Label the following statements as being either true or false. Each label may be used more than once.1. Product differentiation can include small physical changes to the product, physical location of where the product is sold, and perceptions about the product brought about by advertising. 2. Monopolistic competition through the use of product differentiation promotes productive and allocative efficiency automatically since the market forces are at work. 3. One of the problems of product differentiation is that the price of differentiated products is higher than they would normally be.

A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopoly has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.

An example of monopolistic competition are restaurants

In a monopolistic competition, price is higher than marginal costs, so the market cannot be productively efficient. Also, price is higher than marginal cost, so monopolistic competition cannot be allocative efficient.

mahak08 mahak08 · Answer 2 · 2022-04-05T13:52:33+02:00

Product differentiation is primarily a marketing approach used to persuade consumers to choose one brand or product over another in a competitive marketplace of competitors.

What are the four monopolistic competition situations?

Monopolistic competition describes an industry in which several firms provide similar (but not perfect) equivalents for their products or services.

First, the market contains a big number of enterprises, none of which are large. Second, there is open admission and departure into the market; there are no entry or exit barriers.

Third, each firm in the market creates a distinct product. This last need distinguishes monopolistic competition from perfect competition.

Thus, the labels of these three statements are 1) True

2) False

3) True

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