Question

Retailing is often characterized as?

1) monopolistic competition
2) vertical competition
3) pure monopoly
4) pure competition
5) perfect competition

Answer 1

The correct option is A). Retailing is often characterized as monopolistic competition, where many firms compete with differentiated products, as exemplified by the diverse stores in the Mall of America.

Step-by-step explanation:

Retailing is often characterized as monopolistic competition. In a monopolistic competition, many firms sell differentiated products that are not identical. An illustration of this can be seen at the Mall of America in Minnesota, where a diverse array of stores such as Ann Taylor, Urban Outfitters, Banana Republic, J. Crew, Nordstrom's, Motherhood Maternity, and Victoria's Secret compete within the same space, each offering unique products to consumers. Differentiation in this context is derived from product characteristics, locations, intangible aspects, and consumer perceptions.