Which of the following factors signify monopolistic competition?<br>1. Differentiated products<br>2. Large number of buyers and sellers<br>3. Barriers to entry<br>4. Homogeneous products<br>Select the correct answer using the code given below:
- A. 1 and 2 only ✓
- B. 1, 2 and 3 only
- C. 3 and 4 only
- D. 2 and 4 only
Correct Answer: A. 1 and 2 only
Explanation
Monopolistic competition is a market structure characterized by a large number of buyers and sellers offering differentiated (not homogeneous) products, with relatively easy entry and exit (no strict barriers).
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