An example of a monopolistic competitive industry is:
A) produce.
B) white T-shirts.
C) sodas.
D) sugar.

Question

Quizplus · Accepted Answer

Sodas are an example of a monopolistic competitive industry because there are many firms producing differentiated products (i.e. Coca-Cola, Pepsi, Dr. Pepper, etc.) but each firm has some degree of market power due to their brand recognition and customer loyalty. This allows them to charge slightly higher prices and still maintain a share of the market. The other options (produce, white T-shirts, and sugar) are either too uniform or too undifferentiated to be considered monopolistically competitive industries.

An Example of a Monopolistic Competitive Industry Is