ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Monopolistically competitive industries are those that contain more than a few firms, each of which offers a similar but not identical product. Take fast food, for example. The fast food market is quite competitive, and yet each firm has a monopoly in its own product.

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: -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-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: -Restaurants are a monopolistically competitive sector; in most areas there are many firms, each is different, and entry and exit are very easy. Each restaurant has many close substitutes-these may include other restaurants, fast-food outlets, and the deli and frozen-food sections at local supermarkets.