Elmer's Glue has captured the market for school glue. It is preferred by both students and parents alike. It takes very little capitalization to enter the market but nobody successfully does. The glue clearly needs no patents or secret formulas. This type of market is called:
A) pure or perfect competition.
B) oligopoly.
C) monopolistic competition.
D) monopoly.

Question

Quizplus · Accepted Answer

Monopolistic competition is a type of market in which there is a large number of sellers offering similar but not identical products. The products may have slight differences in quality, packaging, or branding, creating a sense of differentiation among consumers. Elmer's Glue has captured the market for school glue due to its strong brand recognition and reputation among consumers. While it may not require a large capital investment to enter this market, the presence of an established competitor makes it difficult for new entrants to gain a foothold. This scenario is characteristic of monopolistic competition.

Elmer's Glue Has Captured the Market for School Glue