Q.

Tooth paste is a product sold under :

A. Monopolistic Competition
B. Perfect Competition
C. Monopoly
D. Duopoly
Answer» A. Monopolistic Competition
Explanation: Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another as goods but not perfect substitutes (such as from branding, quality, or location). In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. There are six characteristics of monopolistic competition (MC): (1) Product differentiation; (2) many firms; (3) Free entryand exit in the long run: (4) Independent decision making; (e) market power; and (f) Buyers and Sellers do not have perfect information.
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