Which of the following industries is best characterized as monopolistically competitive?
A) Cereal
B) Crude oil
C) Wheat
D) Local electricity service

Question

Quizplus · Accepted Answer

The cereal industry is best characterized as monopolistically competitive because there are many different brands of cereal that are differentiated by factors such as taste, texture, and marketing. While there may be some brand loyalty among consumers, there are also many substitutes available, and barriers to entry are relatively low. Crude oil and wheat are both examples of goods that are typically produced in highly competitive markets, while local electricity service is often provided by regulated monopolies.

Which of the Following Industries Is Best Characterized as Monopolistically