Question

In most large cities there are a large number of bakeries. These bakeries produce similar, but not identical, products. Some bakeries claim to have the best cheesecakes in town, while others brag about their cookies or specialty breads. The bakery market in a large city is an example of:A.Monopolistic competition.B. Perfect competition.C. An oligopoly.D. A monopoly.

Answer 1

Answer:

The correct answer is option A.

Explanation:

A monopolistic market is a market structure that has a large number of buyers and sellers in the market. The sellers produce heterogeneous or differentiated products which are close substitutes. There are relatively easier entry and exit in the market as compared to a monopoly market.

There is a high degree of competition in the market and the producers use an advertisement to promote their products.