ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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products are very similar so there must be product differentiation
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very competitive
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lots of advertising
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identical products
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Detailed explanation-1: -Monopolistic competition is a market structure where there are large number of sellers selling differentiated products. There is also no barriers to entry. Every body can fix the price as per their choice. Hence, abnormal profits in the long run is not a characteristic of a monopolistically competitive market.
Detailed explanation-2: -In monopolistic competition, we still have many sellers (as we had under perfect competition). Now, however, they don’t sell identical products. Instead, they sell differentiated products-products that differ somewhat, or are perceived to differ, even though they serve a similar purpose.
Detailed explanation-3: -Monopolistic competition portrays an industry wherein many firms offer services and products that are comparable (however noticeably flawed) substitutes. Barriers to exit and entry in a monopolistic cutthroat industry are low, and the choices of any one firm don’t straightforwardly influence those of its rivals.
Detailed explanation-4: -Product differentiation Was this answer helpful?
Detailed explanation-5: -Answer and Explanation: The correct answer is d. lettuce farmers. They sell identical products while in a monopolistic competition market, there is product differentiation.