ECONOMICS
COMPETITION AND MARKET STRUCTURES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Electricity
|
|
|
Shampoo
|
|
|
Soda
|
|
|
Cereal
|
Detailed explanation-1: -Monopolistic competition exists when many companies offer competitive products or services that are similar, but not exact, substitutes. Hair salons and clothing are examples of industries with monopolistic competition.
Detailed explanation-2: -The market for shampoo is a good example of monopolistic competition. Firms differentiate through features and marketing with claims like more attractive hair, anti-dandruff, and anti-hairloss features.
Detailed explanation-3: -YES! Companies that sells goods like toothpaste, shampoo, soap, toilet paper– firms that advertise (but have basically the same product) and claim their product is superior to competitors products are monopolistically competitive firms!
Detailed explanation-4: -For example, different types of soap, tooth brush, perfumed oil and other cosmetic goods, ready-made shoes and dresses, are all sold in markets under monopolistic competition. Close substitutes of each of these goods are produced by a large number of sellers.