There are more than 100 companies that manufacture natural and artificial flavorings used to enhance the taste of food before it is sold to consumers. Many of these manufacturers are regional operations. Many differentiate themselves from the competition in their advertising by specializing in one or two types of foods for which they provide flavorings. Some use their distribution strategies as a means of differentiating themselves from their competition. This industry is most likely an example of
A)pure monopoly.
B)oligopoly.
C)monopolistic competition.
D)bilateral monopoly.
E)monopolistic oligopoly.

Question

Quizplus · Accepted Answer

The description of the industry, with more than 100 companies manufacturing similar but not identical products, regional operations, and advertising focused on specialized products and distribution strategies, suggests that the industry is an example of monopolistic competition. In this type of market structure, there are many small competitors who differentiate themselves from each other through branding, advertising, and other means, but the products are not perfect substitutes for each other.

There Are More Than 100 Companies That Manufacture Natural and Artificial