Question

Corner Market Inc. is a supermarket chain. Due to strong competition from other stores in the industry, Corner Market has aggressively used branding, pricing, and superior customer service to uniquely position itself in the market. As a result, the supermarket chain has been able to differentiate itself from its competitors and sell its products at higher prices. Which of the following industry competitive structures does this scenario best illustrate? perfect competition monopolistic competition oligopoly monopoly

Answer 1

Answer:

The correct answer is a monopolistic competition.

Explanation:

Monopolistic competition is a form of market in which there are a large number of buyers and sellers. The sellers are providing differentiated products which are close substitutes.

There is a high degree of competition in the market. The entry and exit in the market are relatively easier than a monopoly market.

To increase their market share and earn more profits, the firms take the help of branding and advertising.

In the given example, the supermarket chain is operating in monopolistic competition as it has to face a high degree of competition and is using branding, etc to create a niche for itself.