Consumers can choose from hundreds of different kinds and producers of cheese, each with a slightly different flavour and texture. This type of market structure is known as ______.

Question

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Monopolistic competition refers to a market structure where there are many producers selling products that are differentiated from each other in some way, such as through branding or slight variations in quality. This is characteristic of the cheese market, where there are many different producers offering a range of cheeses with slightly different flavours and textures. Pure competition would imply that all producers make an identical product, which is not the case for cheese. A monopoly would imply that there is only one producer in the market, which is also not the case for cheese. An oligopoly would imply that there are a small number of producers who dominate the market, which is not necessarily true for the cheese market.

Consumers Can Choose from Hundreds of Different Kinds and Producers