Final answer:
Marco and Marta's businesses are involved in monopolistic competition, a market structure with many firms offering similar but not identical products, focusing on differentiation to attract customers.
Step-by-step explanation:
The type of competition that exists between Marco and Marta's businesses can best be described as monopolistic competition. Monopolistic competition describes a market structure featuring a large number of competing firms, with each firm offering a product that is similar but not identical. This market structure allows for differentiated products and brands, such as the wide variety found in clothing stores at the Mall of America. In this environment, Marco and Marta's businesses would engage in advertising, branding, and product differentiation to attract customers.
Other market structures include perfect competition and monopoly. Perfect competition involves many firms selling identical products, while monopoly involves a single firm dominating a market without close substitutes. The existence of these market structures, including monopolistic competition, allows businesses to behave in ways that balance between the extremes of perfect competition and monopoly.