Question

Which of these businesses are in monopolistic competition?

a. Two clothing shops, one selling women's clothing and the other selling kids' clothing
b.Two agricultural producers, each selling a variety of kinds of citrus fruit
c.Two pet stores, one of which sells dog products and the other of which sells bird products
d.Two phone providers, each offering benefits to customers who switch to its service

Answer 1

d. because  they want the same customers and have the same product

Answer 2

Answer: d. Two phone providers, each offering benefits to customers who switch to its service

Explanation:

Monopolistic competition occur when there are many firms producing different products which has close substitutes, that is the products are similar. Also, products are known or recognised based on their quality or design and producers are free to enter or exit because there are no barriers. Hence, advertisement is used in promoting sales of goods and services and firms tend to lower prices in order to sell their goods.