Which of the following firms are in a monopolistically competitive market?

Question

Quizplus · Accepted Answer

Monopolistic competition is a market structure where firms sell differentiated products and face competition from other firms selling similar but not identical products. Retail firms such as JCPenney, Sears, and The Gap sell different types of clothing, but each has unique features and characteristics that make them slightly different from their competitors. This type of market structure is considered to be monopolistically competitive.

Answer: D
 Farmers that grow wheat are in a perfectly competitive market structure because they are selling an identical product, there are many buyers and sellers, and entry and exit into the market is easy. Local electricity providers, on the other hand, operate in a regulated market with high barriers to entry, which means that they have a degree of market power and are not in a competitive market.

Which of the Following Firms Are in a Monopolistically Competitive