Final answer:
The wedding dress industry is monopolistically competitive, meaning firms can easily enter and exit the industry and they have some market power due to product differentiation. This contrasts with perfect competition where products are identical and firms are price takers.
Step-by-step explanation:
The wedding dress industry is considered monopolistically competitive, which means that there are several distinctive conditions that characterize this market structure. These conditions differ from those found in perfect competition. In a monopolistically competitive market, the following conditions apply:
- There are many firms selling products that are similar but differentiated.
- Firms can easily enter and exit the industry due to low barriers to entry.
- Firms have some market power, which allows them to set prices above marginal cost for their uniquely differentiated products.
- There is not just one seller in the industry, unlike a monopoly where a single firm dominates the entire market.
In conclusion, the best answer to the question is (b) Firms can easily enter and exit the industry, though (c) Firms have significant market power also applies as firms in monopolistic competition do retain some power to set prices due to product differentiation.