Which of the following best illustrates a firm operating in a monopolistically competitive industry?
A) A foreign exchange company sells currencies of different countries at market prices as it cannot differentiate its products from its competitors.
B) A chain of multiplex theaters, along with its competitor, owns 80 percent of the multiplex market share.
C) An automobile manufacturer uses branding, pricing, and superior advertising to differentiate itself from a large number of other automobile manufacturers.
D) A railway company owned by the government of New Darvland owns 100 percent of the railway transport in the country.

Question

Quizplus · Accepted Answer

A monopolistically competitive industry is best illustrated by an automobile manufacturer that uses branding, pricing, and superior advertising to differentiate itself from a large number of other automobile manufacturers. A monopolistically competitive industry is characterized by many firms, a differentiated product, some obstacles to entry, and the ability to raise prices for a relatively unique product while retaining customers.

Which of the Following Best Illustrates a Firm Operating in a Monopolistically