Final answer:
The scenario hints at characteristics of a monopolistic competitive market due to product differentiation and competition among sellers, which contrasts with perfect competition's requirement for identical products.
Step-by-step explanation:
The scenario described with several dozen crust makers and pizza shops sourcing from the cheapest producer relates to the characteristics and assumptions of market structures in economics, specifically perfect competition and monopolistic competition. The fundamental differences between these market structures lie in factors such as the number of sellers, product differentiation, and entry barriers.
In a perfectly competitive market, there are many sellers offering identical products, with free entry and exit in the market and full information. Here, no single firm has market power to influence prices. In this scenario, the assumption of 'not an identical product' would not hold true; perfect competition assumes identical products being sold by all firms. Thus, option D might be the most appropriate answer as the pizza crusts are differentiated by price alone, but not necessarily identical.
In contrast, monopolistic competition is characterized by many sellers offering similar but differentiated products, with some degree of market power due to product differentiation. The scenario discussed fits the definition of a monopolistically competitive market rather than a perfectly competitive one.
If the firms are indeed offering differentiated products and the market doesn't strictly adhere to perfect competition assumptions, a final conclusion could lead us toward monopolistic competition as the correct market structure.