Question

In which market model do firms rely on product differentiation to distinguish themselves from the competition?

Multiple choice question.

pure competition
pure monopoly
monopolistic competition
oligopoly

Answer 1

Monopolistic competition is the market model in which firms rely on product differentiation to distinguish themselves from the competition. This means that in this market structure, many firms sell differentiated products.

Step-by-step explanation:

Monopolistic competition is the market model in which firms rely on product differentiation to distinguish themselves from the competition. In this market structure, many firms sell differentiated products, meaning they offer products that are unique or have slight variations from their competitors. These differentiated products can arise from characteristics of the product, location of sale, intangible aspects, and perceptions of the product.