Question

In which market is product differentiation found?

• A. Pure competition
• B. Perfect competition
• C. Monopoly
• D. Monopolistic competition

Hint:

Remember the key features: Perfect Competition = Identical Products; Monopolistic Competition = Differentiated Products.

Answer 1

The Correct Option is D

Product differentiation is the key feature that distinguishes monopolistic competition from other market structures. In this market, many firms sell products that are similar but not identical. They differentiate their products through branding, packaging, design, and advertising.

Perfect competition involves identical, homogeneous products.
Monopoly involves a single, unique product with no close substitutes.