Final answer:
Michael's Deli has competitive parity, meaning it's on equal footing with its competitors. It does not have a competitive advantage or disadvantage, and it operates within a market likely characterized by monopolistic competition.
Step-by-step explanation:
If Michael's Deli is able to perform at the same level as its primary competitor, Michael's Deli has competitive parity. Competitive parity means a business is on an equal footing with its competitors regarding a performance metric such as cost, product quality, or market share. In contrast, a competitive advantage indicates that a company outperforms its rivals, while a competitive disadvantage means the opposite. A noncompetitive business would be one that does not have significant competition, either because of a monopoly, niche market, or other barriers to competition.
Using the concept of monopolistic competition, we see that businesses like the Authentic Chinese Pizza store must differentiate their products to compete with other similar businesses, with all facing downward-sloping perceived demand curves. Over time, successful businesses in such markets may face new competitors as others enter the market. For example, a restaurant with a unique barbecue sauce may prompt competition from other restaurants looking to create their own distinctive offerings.