MICRO ECONOMICSFINALcoordination and an equilibrium outcome that is rational given the context and availableinformation.41.A monopolistically competitive industry has many firms that sell differentiated products.
42. Significant barriers to entry exist in a monopolistically competitive industry.
Page 230Reason - Monopolistic competition is characterized by relatively low barriers to entry and exit. Newfirms can enter the market and offer differentiated products to compete with existing firms. Whilethere may be some costs and challenges associated with entering a market, such as establishingbrand recognition or developing unique product features, these barriers are generally not significantcompared to industries with high barriers to entry, such as monopolies or oligopolies. Inmonopolistically competitive industries, the freedom for new firms to enter and compete helpsmaintain a relatively competitive market structure.
