A significant difference between a monopolistically competitive firm and a purely competitive firm is that the

A) former has fewer barriers to entry into the industry.
B) latter recognizes that price must be reduced to sell more output.
C) latter's demand curve is perfectly elastic.
D) latter differentiates its product.

Monopolistically Competitive

Refers to a market structure where many firms sell products that are similar but not identical, allowing them some power to set prices due to product differentiation.

Purely Competitive

A market structure characterized by many sellers offering identical products, with no single seller able to influence the market price.

Perfectly Elastic

A situation in which the quantity demanded or supplied responds infinitely or massively at a particular price point.