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Here is the question:

A monopolistically competitive firm’s demand curve will be least elastic if

A - the number of rival firms producing very similar products increases

B - the number of rival firms producing more differentiated products increases

C - the number of rival firms producing very similar products decreases

D - the number of rival firms producing more differentiated products decreases

E -a monopolistically competitive firm’s demand curve becomes perfectly elastic

The answer is D, but I feel that C is better. The only justification I can think of for D is that you are supposed to rule out C because in monopolistic competition there are only firms with differentiated products and thus firms with similar products (answer C) must refer to a different market structure. Is this correct?

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