In this kind of market, firms produce goods that are very close substitutes.

Question

Group of answer choices

Perfect Competition

Oligopoly

Pure Monopoly

Monopolistic Competition

Answer 1

In a market where firms produce goods that are very close substitutes, the correct answer is Monopolistic Competition.

In monopolistic competition, many firms sell products that are similar but not identical, leading to competition based on factors like branding, quality, and price.