Question

Elmer's Glue has captured the market for school glue. It is preferred by both students and parents alike. It takes very little capitalization to enter the market, but nobody succeeds in doing so. The glue clearly needs no patents or secret formulas. This type of market is called a(n)

Answer 1

Answer: Monopolistic competition.

Monopolistic competition can be defined as an competitive industry where several organizations offer commodities and services that are quite similar but cannot be considered as perfect substitutes and thus the barriers to this industry are low and actions of an organization does not directly affect its competitors. In the given scenario, there are barriers and decisions of one organization does not affect its competitors.