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Scilla [17]
2 years ago
10

If the number of firms in a monopolistically competitive industry increases and the degree of product differentiation diminishes

:
Business
1 answer:
Viefleur [7K]2 years ago
5 0

Answer:

C) the industry would more closely approximate pure competition

Explanation:

A monopolistically competitive industry is one with different firms selling similar products that are slightly differentiated. It is very easy for firms to enter into industries that are monopolistically competitive. They also have the autonomy to increase their prices.

If the number of firms in a monopolistically competitive industry increases and the degree of product differentiation diminishes they would then resemble a pure competition because they would all be selling identical products which would result in little or no competition.

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