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Which of the following statement is NOT correct regarding monopolistic competition?

358667Medium DSSSB TGT Computer Science 0 replies 0 views
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Which of the following statement is NOT correct regarding monopolistic competition?
  • AThe market structure of the firm allows for new firms to enter the market
  • BThe marginal revenue is slightly less than the average revenue
  • CThe goods produced by them are not homogeneous
  • DThe demand curve faced by the firm is horizontal
Correct answer: D

Explanation

In monopolistic competition, firms face a downward-sloping demand curve because their products are differentiated. A horizontal demand curve belongs to perfect competition, so D is not correct.

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