Which scenario BEST represents monopolistic competition?

A. Two new restaurants open to compete with a national food chain.

B. Two firms compete against each other to sell pearls in an urban market.

C. A family decides to stay at specific hotel on vacation because it has a swimming pool with a slide.

D. A company wins a contract to be the sole provider of phone and cable television service for a city.

I believe the answer is D. however, I'm not 100% sure.

Note: This particular question is in the economics field.

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Braeden Peters

24 June, 22:14

Which scenario BEST represents monopolistic competition?

A. Two new restaurants open to compete with a national food chain.

B. Two firms compete against each other to sell pearls in an urban market.

C. A family decides to stay at specific hotel on vacation because it has a swimming pool with a slide.

D. A company wins a contract to be the sole provider of phone and cable television service for a city.

I believe the answer is D. however, I'm not 100% sure.

Note: This particular question is in the economics field.

+4

Answers (2)

Know the Answer?

Emma Dickson · Answer 1

C. A family decides to stay at specific hotel on vacation because it has a swimming pool with a slide.

Dario Foster · Answer 2

The example that best represents a monopolistic competition is option D) "A company wins a contract to be the sole provider of phone and cable television service for a city."

Monopolistic competition always refers to a company offering a service and has no other companies to compete with. In this case, consumers cannot choose among different providers of the same service.

Options A and B are incorrect since in the examples there are companies and chains competing one another in a given area.

Option C is also incorrect since a family is making a decision based on the facilities offered by a hotel which does not mean that there are no other hotels in the vacation area they chose.