A Monopolistically Competitive Firm

A monopolistically competitive firm:

A) sells products that are perfect substitutes for its competitors' products, so must compete on the basis of location.
B) sells products that are close substitutes for its competitors' products, so will locate as far away from its competitors as possible.
C) sometimes distinguishes its output from that of its competitors by locating in a more convenient place.
D) will be more successful the more similar its output is to its competitors' output.

Correct Answer:

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