The type of industry structure that has many firms, each producing a differentiated product, with no barriers to entry or exit is called A

Marketing Jan 14, 2021

The type of industry structure that has many firms, each producing a differentiated product, with no barriers to entry or exit is called

A. perfect competition.

B. monopolistic competition.

C. monopoly.

D. oligopoly.

Expert Solution

The correct option is:

B. monopolistic competition.

Under monopolistic competition, the industry consists of a large number of buyers and a large number of suppliers. A single seller or a single buyer cannot influence the price or quantity exchanged in the market. They all deal with differentiated products and face no entry or exit barriers. The suppliers in this industry indulge in massive advertisements and promotional campaigns to attract prospective buyers.

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