Which of the following is the best example of a monopolistically competitive market?
A) Wheat.
B) Automobiles.
C) Diamonds.
D) Retail sales.

Question

Quizplus · Accepted Answer

Retail sales is the best example of a monopolistically competitive market as there are many retailers who sell similar products but have some differentiation in their offerings such as product assortment, service, or location. This differentiation allows for each retailer to have some market power and control over price. Wheat is an example of a perfectly competitive market, automobiles have elements of oligopoly with a few dominant firms, and diamonds are a highly concentrated market with limited competition.

Which of the Following Is the Best Example of a Monopolistically