Question

Andy compares mattresses. A twin-sized NightSoft mattress at the large chain BuyRite costs $1,500. The BuyRite saleswoman tells Andy that the company's 24-hour customer service, free mattress cleaning, and 60-day return policies are the best in the business.

A similar twin-sized model, the DarkNights mattress, at the small store Joe's Bed and Linens, costs $1,495. The salesman at Joe's tells Andy that this store offers a 30-day money-back guarantee, plus free delivery.
Which of these is Andy experiencing?
Non-price competition in a monopolistically competitive market
Non-price competit

Answer 1

Non-price competition in a monopolistically competitive market

Step-by-step explanation:

Monopolistic markets are characterized by a small number of firms that sell similar products and compete through differentiations in products or services, but whose prices are similar, ie not competitive price.

The narrated case is indicative of monopolistic competition, since the product and price are similar and what differentiates firms is the type of service provided. In one case, there are 60 days changeover and 24-hour customer service and free product cleaning. In the other case, the store offers 30 days for exchange and free delivery at cost. The intuition of each store in these types of post-purchase services is to generate a differentiation in its product, which is similar to that of the other store, in order to attract the customer. Therefore, there are few firms, the competition is non-price, with similar products and with small directions in service, all these parameters are from a monopoly competition market.

Answer 2

It seems that you missed some of the options to answer this question, but anyway, here is the answer. Based on the given scenario above wherein Andy compares two stores selling the same model of mattresses, the one that Andy is experiencing is a non-price competition in a monopolistically competitive market. The answer would be the first option. Hope this helps.