In monopolistic competition,
A) one firm completely controls a broad product-market.
B) each competitor tries to get control in its "own" target market.
C) competitors offer the same marketing mix.
D) different marketing mixes are nevertheless seen as the same by all customers.
E) all customers view various alternatives as substitutes.

Question

Quizplus · Accepted Answer

Monopolistic competition is characterized by a large number of firms competing with each other in the same market, but each firm tries to differentiate its product from others in order to capture a larger share of the market. Therefore, each competitor tries to establish its own unique target market by offering a unique marketing mix that appeals to a particular group of customers. This leads to product differentiation and some degree of market power for each firm.

In Monopolistic Competition