Asked by Haley Smith on Jun 26, 2024

verifed

Verified

The restaurant,legal assistance,and clothing industries are each illustrations of:

A) countervailing power.
B) homogeneous oligopoly.
C) monopolistic competition.
D) pure monopoly.

Monopolistic Competition

A market structure characterized by the presence of many firms that sell similar but not identical products, allowing for slight differentiation among products.

Legal Assistance

Professional legal support and services provided to individuals or organizations, often to help navigate legal issues or disputes.

Homogeneous Oligopoly

An oligopoly in which firms produce a standardized product.

  • Determine the essential characteristics and elements that delineate monopolistic competition.
verifed

Verified Answer

TM
Takahiro MaruyamaJun 29, 2024
Final Answer :
C
Explanation :
The restaurant, legal assistance, and clothing industries are all examples of monopolistic competition. Monopolistic competition is a market structure in which many firms sell products that are similar but not identical. Each firm has some ability to set its own price and differentiate its product from competitors. This is consistent with the variations between different types of restaurants, law firms, and clothing brands. However, none of these industries have a dominant firm or significant barriers to entry, meaning they do not fit into the category of pure monopoly or homogeneous oligopoly. Countervailing power is a concept that applies more to market power in relation to buyers and suppliers, rather than within an industry itself.