Which of the following is a feature of monopolistic competition?
A. Single seller
B. Perfect knowledge and free entry without costs
C. Product differentiation
D. Homogeneous product
Answer: Option C
Solution (By JKSSB Mock Tests)
Monopolistic competition is characterised by product differentiation, a large number of firms, free entry and exit, and some degree of price control by firms.
Explanation:
Second-generation models emphasise that the decision to abandon a peg depends on policy trade-offs; expectations of devaluation can themselves raise the cost of defending the peg, generating self-fulfilling crises and multiple equilibria.
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