Which market structure has a strong incentive for product development and differentiation?
A) monopolistic competition
B) pure competition
C) pure monopoly
D) oligopoly

Question

Quizplus · Accepted Answer

In monopolistic competition, there are many firms competing with each other by selling similar but not identical products. This gives each firm a strong incentive to develop and differentiate their products in order to stand out from their competitors and attract customers. This competition for product differentiation is the main driver of innovation in this market structure.

Which Market Structure Has a Strong Incentive for Product Development