The movie You've Got Mail features a successful small bookstore competing with a new book superstore around the block.The big superstore offers deep discounts,while the small independent bookstore has better service and more knowledgeable staff.The movie best illustrates which of the following?
A) For monopolistically competitive firms, profits will be positive in the long run.
B) Homogeneous products are produced by both firms because consumers perceive books from either store as the same.
C) Product differentiation occurs because consumers perceive the bookstores as different.
D) Monopoly production occurs because the movie is copyrighted.
E) Perfect competition occurs because many movie theaters are showing identical movies.

Question

Quizplus · Accepted Answer

The movie best illustrates product differentiation, as the two bookstores offer different services and experiences to customers. The small independent bookstore differentiates itself through better service and knowledgeable staff, while the big superstore competes on price with deep discounts. Both stores sell books, but consumers perceive them as different due to their unique characteristics. This is a key characteristic of monopolistic competition, where firms differentiate their products to attract customers.

The Movie You've Got Mail Features a Successful Small Bookstore