Question

Question 11 Which of the following goods are likely to be sold in a monopolistically competitive market? jeans breakfast cereal electricity distribution in Chicago postage stamps # w

Answer 1

Monopolistic competitive market is a market type in which there are -

1.large number of sellers and buyers .

2.there are few entry and exit barrier in the market .

3.products are slightly differentiated in terms of Shape ,size ,colour etc .

In the given question ,Electricity Distribution in Chicago and postage stamp will come under the Monopoly because it is controlled by the government itself .

so only the seller is the government

Breakfast cereal will come under the perfect competition market because of the homogeniety of cereal by all the sellers .

Cereal is a a perfect competitive good because it has a large supplier and buyers.

but jeans will come under the monopolistic market because it is slightly differentiated in terms of Shape, size ,colour etc and company in this type of market mostly focuses on advertisement to stay ahead of their competitors.

answer is option A