Which of the following statements best characterises the situation of a firm in monopolistic competition? There are a number of firms in the market and because of the level of competition, the firms are simply price-takers. The firm faces a downward-sloping demand curve that is close to that of the market demand curve. O The firm faces a horizontal demand curve. O There is only one firm in the industry in the short run. There are a number of firms in the industry, each producing a similar product which is a close but not perfect substitute for the products of other firms