Question

Siyed, an economics student, believes that a beer sold by one particular shack on the beach is completely different from an identical beer produced by the same factory and sold by the luxury hotel adjacent to the shack. Siyed most likely thinks that

A the luxury hotel and the shack are in a perfectly competitive industry.
B the luxury hotel is a monopoly seller of the beer.
C the luxury hotel and the shack are in a monopolistically competitive industry.
D the shack is in a perfectly competitive industry, but the luxury hotel is in an oligopoly industry.
E while beer is homogeneous, the product is differentiated among the sellers.

Answer 1

Answer: E. while beer is homogeneous, the product is differentiated among the sellers.

Explanation: In a bid to construct specific competitive advantages over competitors, sellers of similar or identical products often differentiate them usually through packaging or branding among others. This is known as product differentiation which when successful, leads to competitive advantage. While the beers are identical since they are produced by the same factory, the different stores may differentiate them in order to prod the consumers into choosing one over the other. As a result, Siyed most likely thinks that while the beer is homogeneous, the product is differentiated among the sellers.

Answer 2

E) while beer is homogeneous, the product is differentiated among the sellers.

Explanation: The beers are quite identical but each seller differentiates it