How does the presence of monopolistic competition influence product variety and innovation in a market? A. It decreases product variety and stifles innovation due to the lack of competition. B. It increases product variety and encourages innovation as firms seek to differentiate their products. C. It has no significant impact on product variety and innovation. D. It leads to standardization of products and processes, reducing product variety but increasing efficiency.

How does the presence of monopolistic competition influence product variety and innovation in a market? A. It decreases product variety and stifles innovation due to the lack of competition. B. It increases product variety and encourages innovation as firms seek to differentiate their products. C. It has no significant impact on product variety and innovation. D. It leads to standardization of products and processes, reducing product variety but increasing efficiency.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter14: Monopolistic Competition And Product Differentiation

Section: Chapter Questions

Problem 10P

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