Final answer:
Product differentiation is a source of market power for monopolistically competitive firms such as automobile manufacturing, local water company, corn farming, and hotels. All of the given options are correct.
Step-by-step explanation:
Monopolistic competition refers to a market where many firms sell differentiated products. Product differentiation can arise from various factors such as the characteristics of the product, location, intangible aspects, and perceptions. This type of competition allows firms to have some market power because they can differentiate their products from others, creating a niche market.
For example, in the case of automobile manufacturing, different companies produce cars with different features, styles, and brands, attracting specific groups of consumers who value those characteristics. Similarly, hotels can differentiate themselves based on location, amenities, and services offered, targeting different customer segments.
So, in summary, product differentiation is a source of market power for monopolistically competitive firms because it allows them to offer unique products that appeal to particular consumers.