Everlene's Bakery competes against many other bakeries in the same city. However, each bakery uses different recipes and each claims to offer better products than their rivals. For example, Everlene's advertises that it produces the "World's Best" chocolate chip cookies. This suggests that Everlene's Bakery shows an example of pure competition.

Question

Quizplus · Accepted Answer

Everlene's Bakery's claim of producing the "World's Best" chocolate chip cookies suggests that they are engaging in monopolistic competition, not pure competition, as they are attempting to differentiate their product from their competitors. In pure competition, all firms offer the same or nearly identical products, and differentiation is not a factor.

Everlene's Bakery Competes Against Many Other Bakeries in the Same