ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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differentiation.
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monopolistic competition.
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pure / perfect competition.
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monopolies.
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Detailed explanation-1: -What Industry Is an Example of Monopolistic Competition? Monopolistic competition is present in restaurants like Burger King and McDonald’s. Both are fast food chains that target a similar market and offer similar products and services.
Detailed explanation-2: -Fast food restaurants, hotels, gas stations, clothing stores, medical practices, legal firms, and hair salons are several industries that are monopolistically competitive, assuming they locate in areas with other companies that serve the same clientele.
Detailed explanation-3: -The restaurant industry (monopolistically competitive nationwide) provides an example of a monopolistically competitive market. In most areas, there are many firms, each is different, and entry is easy. Each product has many close substitutes sold by different firms, including other restaurants, fast-food outlets.
Detailed explanation-4: -The correct answer is c. monopolistic competition; similar but not identical. The fast-food industry has all the characteristics of monopolistic competition. First of all the products are slightly different.
Detailed explanation-5: -To date, the most famous United States monopolies, known largely for their historical significance, are Andrew Carnegie’s Steel Company (now U.S. Steel), John D. Rockefeller’s Standard Oil Company, and the American Tobacco Company.