Question:

Which of the following is a criticism of the theory of monopolistic competition?

A.

It is difficult to define a monopolistically competitive market and to determine the firms and products that comprise it

B.

When product differentiation is slight, each firm\s demand curve is nearly horizontal so the perfectly competitive solution provides an adequate approximation to the monopolistically competitive solution

C.

When there are strong brand preferences and few producers of many differentiated products, or when there are many producers but only a few compete as rivals for any given consumer, then the oligopoly solution provides an adequate approximation to the monopolistically competitive solution

D.

All of the above are correct

Answer» d. All of the above are correct