Most firms operate in monopolistic competition, where products and whole marketing mixes are not exactly the same. This implies that
A) there are pricing options.
B) value pricing has no advantage.
C) it's foolish to offer products above the market price.
D) there are no price choices in most markets.
E) it is better to be a price follower.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms have some control over the pricing of their products due to differentiation. As such, there are pricing options available to firms, making option A the best choice. Option B is incorrect because value pricing can still provide an advantage if the firm's product has unique features that customers are willing to pay a premium for. Option C is incorrect as offering products above the market price can sometimes be desirable if the firm can justify the higher price through unique features, benefits, or quality. Option D is incorrect because there are usually pricing choices available to firms, as seen in option A. Option E is incorrect as being a price follower can lead to the firm losing market share and profitability.

Most Firms Operate in Monopolistic Competition, Where Products and Whole