Most U.S. grocery stores sell a variety of boxed breakfast cereals. This observation indicates that the boxed breakfast cereal market is
A)a perfectly competitive market.
B)a monopoly.
C)an oligopoly.
D)a monopolistically competitive market.

Question

Quizplus · Accepted Answer

The existence of a variety of boxed breakfast cereals suggests that there are several firms competing in the market, which is characteristic of a monopolistically competitive market. In a perfectly competitive market, there would be virtually identical products sold by numerous firms, while a monopoly would have only one dominant firm controlling the market. An oligopoly would have a few large firms dominating the market.

Most US Grocery Stores Sell a Variety of Boxed Breakfast Cereals