Final answer:
Pizza Power's decline in sales due to a new Chinese restaurant is known as Indirect Competition, a situation in monopolistic competition where firms with differentiated products vie for the same consumer base.
Step-by-step explanation:
The situation Pizza Power is experiencing where their sales are declining due to a new Chinese restaurant is typically known as Indirect Competition. Monopolistic competition involves many firms that offer differentiated products and compete with one another. The Authentic Chinese Pizza store serves as an example of a monopolistic competitor, serving unique pizzas that compete indirectly with traditional pizza places by offering a differentiated product - pizza with cheese, sweet and sour sauce, and a choice of vegetables and meats. In this scenario, each restaurant or food emporium, while providing a different type of food, vies for the same dining dollars of the consumer base, illustrating the concept of indirect competition.
If a monopolistic competitor like Pizza Power earns positive economic profits, it attracts other firms into the market, which leads to various forms of competition. These could involve other restaurants trying to copy a unique selling proposition or creating new ones to build their own reputations. Such is the nature of monopolistic competition, where distinctive products lead to each firm having a mini-monopoly on its specific offering while still competing in a broader market.