Final answer:
Intratype competition occurs when Sears and JCPenney, two similar discount department stores, compete for the same customers, representing a classic scenario of monopolistic competition in the retail industry.
Step-by-step explanation:
When two discount department stores such as Sears and JCPenney compete for the same customer, the type of competition occurring is intratype competition. Intratype competition refers to competition between the same type of retailers, such as two department stores.
In the context of market structures, this is part of a larger framework known as monopolistic competition, where many firms compete in a market with differentiated products. Because these firms are competing within the same retail format (department stores) and likely targeting similar customer demographics with similar but not identical products, this creates a competitive environment where the nuances of product differentiation, branding, and customer experience become crucial.
Most retail markets that consumers encounter are examples of monopolistic competition, where retailers use various strategies to gain a competitive edge and attract consumers to their unique offerings.