Which of the following is the best description of monopolistic competition?

a. Easy entry, low markup,

b. Barriers to entry, high markup,

c. Horizontal demand curve for the firm,

d. Firm has no control over price,

e. Barriers to entry, low markup.

The correct answer is a) Easy entry, low markup

Easy entry and low markup is the best description of monopolistic competition. Firms are free to enter and exit in the monopolistic market. Also, firms in the monopolistic market set low mark up to their products in order to compete in the market. The competition between firms in the market induces them to place low markup in order to increase their market share.