If a firm in a purely competitive market can differentiate its product or service, it becomes part of a _______________ market.
A) pure competition
B) oligopolistic competition
C) monopolistic competition
D) monopoly
E) duopoly

Question

Quizplus · Accepted Answer

If a firm in a purely competitive market can differentiate its product or service, it becomes part of a monopolistic competition market. This type of market structure is characterized by a large number of firms, each of which offers a differentiated product or service. The firms have some market power, but there is still a significant degree of competition, as consumers can choose among the different products or services offered. The market is not dominated by any one firm, and entry and exit are relatively easy.

If a Firm in a Purely Competitive Market Can Differentiate