Additional Application
For many years North Carolina-based Krispy Kreme Doughnuts have been the choice of many Southerners.But now rival Dunkin' Donuts is working on changing the way Southerners expect a doughnut to taste.The Northeastern-based Dunkin' Donuts has plans to become a national brand in the next 15 years by tripling the number of stores in the U.S.The difference is in the doughnut itself.Krispy Kreme offers a glazed,hot,lighter doughnut while the product of Dunkin' Donuts can be described as "thicker and cakier." Do consumers notice the difference? Rosemary Evans from Alabama states,"Dunkin' Donuts just don't have much flavor." And Jack Lehnhart from Ohio says Krispy Kremes are "wax doughnuts." As the size of the industry grows the efforts to differentiate each product remain strong.Dunkin' Donuts focuses on coffee and baked goods as important components in its long term business plan.When discussing the two companies and their approaches to success,the brand officer at Dunkin' Donuts succinctly said,"We're very different." Just take note of the different ways they spell the product they produce!
Source: Beth Rucker,"Dunkin' Donuts Raids Krispy Kreme's Turf," October 22,2006,http://hosted.ap.org/dynamic/stories/D/DONUT_WARS,accessed 10/30/2006.
-What market structure best describes the doughnut industry discussed in the article above?

Question

Quizplus · Accepted Answer

The article describes two competing companies, Krispy Kreme and Dunkin' Donuts, both offering similar but slightly different products. This suggests a market structure of monopolistic competition, where there are many firms selling differentiated products but with some degree of market power.

Additional Application For Many Years North Carolina-Based Krispy Kreme Doughnuts Have Been