Question

Sarah’s Ice Cream distinguishes itself from other firms through great service by attractive servers. Sarah’s Ice Cream faces competition from firms that produce similar but not identical products.

Based on this information Sarah’s Ice Cream:

a) is probably in a perfectly competitive industry.
b) probably has a horizontal demand curve.
c) is probably in a monopolistically competitive industry.
d) is probably in an oligopoly industry.
e) has a monopoly.

Answer 1

c) is probably in a monopolistically competitive industry.

Step-by-step explanation:

A monopolistically competitive industry is characterised by many buyers and sellers of differentiated goods and services.

Sellers set the prices for their products and sellers have a downward sloping demand curve.

A perfect competition is characterised by many buyers and sellers of homogenous goods and services.

An oligopoly is characterised by few large firms.

A monopoly is when there's only one firm operating in the industry.

I hope my answer helps you