Final answer:
The grocery store's claim of having the freshest fruits and vegetables classifies as nonprice competition, focusing on product differentiation rather than price. Market competition is evaluated by agencies like the FTC based on actual competitive practices and their effects on markets.
Step-by-step explanation:
The strategy employed by the grocery store claiming that its fruit and vegetables are the freshest in town is an example of nonprice competition. This strategy does not focus on offering lower prices than competitors but rather emphasizes quality and product differentiation. Grocery stores, similar to the case of the Whole Foods Market and Wild Oats Market merger, may aim to distinguish themselves from competitors through attributes such as freshness, organic options, and other value-added services that can influence consumer choice. The Federal Trade Commission tends to evaluate such competitive practices by looking at actual competition and the effects on profits and prices, rather than just market share, recognizing the complexity of market definitions.