The market in which pumpkins are sold is called which running shoes are sold is called
A. perfect competition; monopolistic competition
B. perfect competition; oligopoly
C. monopolistic competition; oligopoly
D. monopolistic competition; perfect competition
The correct answer and explanation is:
The correct answer is D. monopolistic competition; perfect competition.
Here’s the explanation:
Monopolistic Competition refers to a market structure where many firms sell products that are similar but not identical. In this type of competition, each firm differentiates its product, either by quality, branding, or other features. While there are many firms, they have some degree of market power because they offer a unique product. The market for running shoes falls under monopolistic competition. This is because there are many brands and types of running shoes, but each brand differentiates itself by quality, style, price, or reputation. Companies like Nike, Adidas, and New Balance compete in this market by offering distinct products that target different consumer preferences.
On the other hand, Perfect Competition is a market structure characterized by a large number of firms offering identical or nearly identical products, where no single firm has control over the market price. The market for pumpkins typically fits the definition of perfect competition. In this market, numerous farmers sell pumpkins, and the product is relatively standardized. Consumers can easily switch from one seller to another, and no single farmer has control over the price of pumpkins. Prices are determined by supply and demand forces in the market, and individual farmers are price takers.
In summary, running shoes are sold in a monopolistic competition market, as different companies sell differentiated products, whereas pumpkins are typically sold in a perfect competition market due to the uniformity of the product and the large number of sellers.