ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-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: -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.

Detailed explanation-4: -Restaurants, hair salons, household items, and clothing are examples of industries with monopolistic competition. Items like dish soap or hamburgers are sold, marketed, and priced by many competing companies.

Detailed explanation-5: -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.