• Which of the following best explains why firms in monopolistic competition face a downward-sloping demand curve while perfectly competitive firms do not?
• A.Monopolistically competitive industries have only a few firms.
• B.Firms in monopolistic competition are price takers.
• C.Monopolistically competitive firms face barriers to entry.
• D.Only industries with free entry and exit have firms that face horizontal demand curves.
• E.Firms in monopolistic competition sell differentiated goods.