Question

Alison owns a coffee shop in a small city in which there are many similar establishments. she advertises that her coffee is the best in town because the coffee beans she roasts are fair trade​ certified, shade​ grown, and organic. which degree of competition would this best​ describe?

a. oligopoly
b. monopolistic competition
c. monopoly
d. perfect competition
e. natural monopoly

Answer 1

Alison's business idea of coffee shop in a small city with coffee beans that are fair trade​ certified, shade​ grown, and organic is best described with the following degree of competition : Monopolistic competition. (B). The coffee shop will sell products that are differentiated from the product of other coffee shops (because of the special coffee beans). Which means there won't be perfect substitutes. This makes the competition monopolistic.